The Swiss stock exchange SIX has plans to launch its SIX Digital Exchange (SDX) platform later this summer, according to a report from Reuters. SIX chairman Romeo Lacher said the exchange hopes to use blockchain technology to speed up trading, and also intends to use the platform to raise funds during a security token offering after SDX launches. The news was reported by Cointelegraph Deutschland Feb. 4.
SIX Swiss Exchange sees roughly 5.19 billion Swiss Francs (CHF) (~$5.18 billion) in daily turnover, and has a market capitalization of over 1.67 trillion CHF ~($1.6 trillion).
CEO Jos Dijsselhof told Cointelegraph Deutschland in an interview that the company had chosen the technology for the time efficiency and improved security it can offer across all stages of stock trading and settlement: “The fact is, it takes two days for the buyer of a stock to become the owner. The trade itself only takes a fraction of a second, but after that payments have to be settled and titles transferred. If we put it all on our digital exchange, then the whole process takes only a few seconds. This makes the market more efficient, but at the same time also takes risks out of the system. “
Dijsselhof added that wholly digital, blockchain-powered stock trading will not only minimize risks, but widen the range of tradable titles, affirming his ambition that SIX would succeed in building “a whole new stock market on the blockchain with completely integrated trading, handling and custody of digital assets”.
According to Lacher, as of now, the exchange is working with the Swiss Financial Market Supervisory Authority (FINMA), the country’s financial regulator, to clarify any legal or regulatory issues the platform may face before its launch in “late summer” 2019. In early December 2018, the financial watchdog was working on relaxing license requirements for blockchain-based projects looking to become a part of Switzerland’s FinTech sector.
Reuters further reported that SIX expects its blockchain-based SDX digital exchange to supersede its existing marketplace within a decade. Lacher said the company also has plans to launch its own Security Token Offering, which will offer investors an equity stake in exchange for capital.
Unnamed SIX officials told Reuters that SDX will begin by rolling out support selected stocks, followed by bonds, and possibly exchange-traded-funds (ETFs).
SIX’s retooling is part of a string of European financial institutions looking to roll blockchain technology and cryptocurrency-based programs into what they offer potential and current clients. In December 2018, Gazprombank (Switzerland) announced that it would begin to develop cryptocurrency-linked banking services to be offered in 2019. That same month, the German stock exchange Börse Stuttgart began working on a cryptocurrency trading program that would allow both buyers and sellers to deal in financial instruments that may not have an official market.