Today Swiss stock exchange group SIX launched its Digital Collateral Service which supports the use of crypto as collateral alongside conventional assets. SIX operates one of Europe’s largest triparty agents, which provide an outsourced collateral management solution for financial institutions.
This is a major step forward for the institutional adoption of crypto, as triparty agents are core to institutional collateral management activities. Hence, institutions don’t have to use a separate platform for crypto collateral management. It also provides enhanced protection in cases of default.
However, the service will primarily be used for crypto related transactions – by ETP issuers, institutional traders and crypto exchanges. Given the volatility of crypto prices, we wondered whether the solution allows crypto to be used for all kinds of traditional trades. It does not.
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