SIX, the operator of the Swiss Stock Exchange, has announced the launch of SIX Digital Exchange to trade digital assets. Zurich based SIX is controlled by an association of banks. SIX Group Ltd is an unlisted public limited company owned by around 130 domestic and international financial institutions, which are also the main users of its services. No single owner or type of bank has an absolute majority.
SIX has a bit of a legacy for being innovative. In 1995, the Swiss Exchange was the first exchange in the world to fully automate trading and clearing of securities.
SIX is also the joint owner of Eurex, the 2nd largest futures and derivatives exchange in the world, following the Chicago Mercantile Exchange (CME).
SIX will now launch a fully integrated digital asset trading, issuing, settlements, and a much needed custody service.
SIX is fully regulated as an operator of Financial Market Infrastructure (FMI) by the Swiss Financial Market Supervisory Authority (FINMA) and the Swiss National Bank. SIX says the planned “digital asset ecosystem” or SIX Digital Exchange (SDX) will maintain the same standard of oversight and regulation as its more traditional exchange.
“This is the beginning of a new era for capital markets infrastructures,” commented Jos Dijsselhof, CEO SIX. “For us it is abundantly clear that much of what is going on in the digital space is here to stay and will define the future of our industry.”
SIX Digital Exchange will be the first market exchange in the world to offer a fully integrated end to end trading for digital assets. The service will enable the tokenization of existing securities and non-bankable assets to make previously un-tradeable assets tradable.
SIX says it is “ideally positioned to drive the digital transformation of the Swiss financial center and provide the roadmap to Switzerland‘s future financial infrastructure with SIX Digital Exchange.”
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The digital exchange will be “mainly based on Distributed Ledger Technology” (DLT) or blockchain. The approach is being described as a “bridge for clients from the traditional to the new world.”
SIX is in a unique position in that it runs the entire securities and payments value chain for Switzerland already, and is well positioned to create a digital ecosystem for the future, allowing existing and new market participants to develop their business models for the opportunities available in this new age of digital assets.
Switzerland has become a preferred jurisdiction for initial coin offerings (ICOs) and crypto innovation. The canton of Zug is known as crypto-valley and has been the launching point for many significant ICOs. Financial regulators have been supportive of this type of Fintech innovation having announced regulatory guidance as well as partnering with the industry to better engage the emerging market.
Industry participants have embraced the need for clear regulation and guidance. While many current cryptocurrency “exchanges” operate in gray areas many are now seeking to become compliant within the jurisdictions they operate. While most traditional exchanges are reviewing blockchain technology and the potential to trade digital assets, Switzerland will be the first exchange to take the leap. By providing a clear path for regulated trading of digital assets, Switzerland will also further its global crypto credibility.
Shane Brett, co-founder and CEO of GECKO Governance – a provider of ICO compliance solutions, lauded the move by SIX;
“This step displays the growing level of confidence which entities such as the Swiss stock exchange and FINMA are placing in the growing blockchain sector, and the increasing understanding of how regulation, transparency, and trust influence perception and uptake of the technology. Switzerland has shown itself to be a hub for blockchain companies, and this announcement further bolsters that reputation. The launch of a fully regulated crypto exchange further highlights Switzerland’s forward-thinking approach to digital assets and cryptocurrencies. Such dynamism and willingness by institutional actors to engage with this emerging economy will hugely benefit the global blockchain ecosystem, particularly once other nations take similar actions.”
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