SIX, the company operating the Swiss stock exchange, announced on July 6 that it is working on the creation of crypto exchange infrastructure, which should begin operating in 2019.
It seems that Switzerland insists on building a reputation as the ultimate crypto haven. The newest developments are the work of SIX, the company in charge of the Swiss stock exchange. The company said it wants to launch a virtual asset trading, settlement and custody service under the name “SIX Digital Exchange” (SDX).
The Swiss Authorities already treat SIX as an operator of Financial Market Infrastructure (FMI), so there shouldn’t be a slight problem there. Consequently, the SIX Digital Exchange will benefit by having the identical standard of monitoring and regulation.
In the announcement, SIX said SDX “will be the first market infrastructure in the world to offer a fully integrated end to end trading, settlement and custody service for digital assets.”
In addition to providing a secure environment for issuing and trading cryptocurrency, the planned “digital asset ecosystem” will “enable the tokenization of existing securities and non-bankable assets to make previously untradeable assets tradeable,” the company said, adding that the provision of first services will begin in mid-2019.
Therefore, clients will have more than enough time to prepare for this new system. Moreover, the company plans to establish a bridge from the traditional to the new system so that clients can choose for themselves how and when to take advantage of the new opportunities the new system provides.
Obviously, the creators of the system will, for the most part, base it on the blockchain or DLT (“Distributed Ledger Technology”) technology.
In the words of Thomas Zeeb, Head Securities and Exchanges at SIX, the digital space is facing a lot of problems, including lack of regulation that would ensure official security, transparency, stability, and accountability. This, in turn, contributes to a lack of trust among the public.
His opinion is that is not the trading of assets that presents the challenge but rather 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 recognized 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,” he said.
SIX CEO Jos Dijsselhof, praised the initiative as “the beginning of a new era for capital market infrastructures,” adding that the company is well aware that much of the developments in the virtual space is here to stay and that they will shape the future of the financial industry.
“The financial industry now needs to bridge the gap between traditional financial services and digital communities. This is the role that we at SIX can play. SIX is in a unique position in that it runs the entire securities and payments value chain for Switzerland already.
Dijsselhof believes SIX’s position is ideal for creating “the digital ecosystem for the future, allowing existing and new market participants to develop their business models for the opportunities available in this new environment. These are strengths that we can bring to the digital space and contribute meaningfully to what is one of the most innovative and dynamic environments of our time,” Dijsselhof said.
SIX is a financial service provider and owner and operator of Switzerland’s financial center. The abbreviation stands for Swiss Infrastructure and Exchange. SIX operates worldwide and its base of operations is in Zürich.
Featured image by Julien