Last week Benjamin Müller from the Swiss National Bank (SNB) observed that the transition of financial markets to blockchain would be an evolution. “We will not see a Big Bang migration to blockchain and DLT. We think this is not realistic and probably also not good practice for regulated financial institutions,” he said, talking during a panel discussion at the OMFIF Digital Money Symposium.
In 1986 the London markets had an event referred to as the “Big Bang” that involved a raft of regulatory changes to increase financial market competition. They were all implemented on a single day. It catapulted London from a laggard to a leader. And it might be worth studying some takeaways from 1986 to inform the approach to DLT. But more on that later.
Switzerland is widely regarded as one of the leaders in regulatory reform for crypto-assets and DLT. And the SNB has been on the frontline of wholesale central bank digital currency (CBDC) research, in part driven by the desire to have a CBDC for DLT settlement by the SIX Digital Exchange (SDX) – the first fully regulated financial market infrastructure for digital securities.
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