The SIX Swiss Exchange announced on 6 July 2018 that it is building a fully end-to-end and fully integrated trading, settlement and custody infrastructure for digital assets.
SIX is fully regulated as an operator of the financial market infrastructure by the Financial Market Supervisory Authority (FINMA) and the Swiss National Bank. The planned 'digital asset ecosystem' – the SIX Digital Exchange (SDX) – is expected to enjoy the same standard of oversight and regulation.
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. The service will provide a safe environment for issuing and trading digital assets such as bitcoin and initial coin offering (ICO) tokens. It will also enable the tokenisation of existing securities and non-bankable assets to make previously untradeable assets tradeable. The first services should be rolled out in mid-2019.
The service will be mainly based on distributed ledger technology. A 'distributed ledger' is akin to an account book that is distributed and stored across multiple locations, providing everyone the same access to the same data.
The implementation approach will provide a bridge for clients from the traditional banking sector to the new digital sector in a timeframe which allows clients to choose for themselves how and when to avail themselves of the new opportunities the new ecosystem provides.
The SDX ecosystem will put banks at the heart of transactions in the digital space and offer them a solid foundation to pursue their business strategies for digital and tokenised assets; however, their role in the future SDX remain unclear.
"This is the beginning of a new era for capital markets infrastructures," stated Jos Dijsselhof, the CEO of 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."
The problem of custody is often considered a key barrier for venture capitalists and other institutional investors looking to get into cryptocurrencies. The SDX might be a welcome response to this issue.
Along with FINMA's guidance on ICOs and the government's guide on ICOs issued in May 2018, SIX's project contributes to making Switzerland one of the most crypto-friendly jurisdictions in Europe, with regulators offering clear guidance on how they expect crypto companies to operate.
For further information on this topic please contact Christophe Rapin at Meyerlustenberger Lachenal's Geneva office by telephone (+41 22 737 10 00) or email ([email protected]). Alternatively, please contact Christophe Pétermann at Meyerlustenberger Lachenal's Brussels office by telephone (+32 2 646 02 22) or email ([email protected]). The Meyerlustenberger Lachenal website can be accessed at www.mll-legal.com.
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