The owner of the Swiss Stock Exchange is planning to launch a digital stock exchange using a distributed ledger. The system will cater for end-to-end digital asset trading, settlement and custody service and aims to launch in mid 2019.
SIX owns the stock exchange and they’ve named the digital platform SIX Digital Exchange (“SDX”). SIX is regulated by Swiss Authorities FINMA and the Swiss National Bank and plans the same for SDX.
The purpose of SIX is to enable the tokenization of existing security and non-bankable assets, “in order to make previously untradeable assets tradeable”. It’s planned as a bridge between the traditional world and the “new world”. In other words it is not for ICOs, but there will be a distributed ledger.
Several platforms are aiming to make previously over-the-counter trades more liquid, particularly stock lending. These include HQLAX, Deutsche Borse, and the Israeli Stock Exchange. The Canadian stock exchange TMX is part of Project Jasper which aims to tokenize stock trading settlement in Canada.
Digital Exchange rationale
According to Thomas Zeeb, Head Securities & Exchanges, SIX, “The digital space currently faces a number of key challenges. These include the absence of regulation that ensures official safety, security, stability, transparency and accountability – all of which contribute to a lack of trust.”
“The challenge is less in the trading of assets but rather in the custody and asset servicing, including asset safety. Do you adopt a model with many sub-custodians, including inefficient interfaces and with inherent risks? Or do you go with a recognised and regulated infrastructure provider who provides all steps of the chain in an integrated and secure model?”
“We believe that the latter has significant value. As the stock exchange infrastructure for Switzerland, we know what it takes to build and run mission-critical and scalable, systemically important services.”
Switzerland’s FINMA is one of the more forward thinking regulators and in February published ICO guidelines which were clearer than most. Together with Zug’s CryptoValley, Switzerland continues to be a trailblazer when it comes to blockchain initiatives.