SIX, the owner and manager of Switzerland’s stock exchange, recently announced plans to launch a full end-to-end ‘digital asset ecosystem’ based on blockchain and distributed ledger technology (DLTs). SIX’s new system – SIX Digital Exchange (“SDX”) – will be the world’s first fully integrated market infrastructure for digital assets.
SIX pioneers the use of DLTs to raise the efficiency of financial services
As SIX is a regulated Financial Market Infrastructure (FMI) operator, it’s new blockchain-based ecosystem – SDX – will “enjoy the same standards of oversight” as non-digital assets, according to their announcement. SIX recorded a group net profit of CHF 207.2 million last year and is fully owned by its users, a group of 127 banks. The aim of SIX is to raise the efficiency of the Swiss financial center and their move to develop a DLT-based ecosystem aims to support this goal.
How will the DLT-based ecosystem work?
SIX’s new ecosystem will be “mainly based on Distributed Ledger Technology (DLT),” according to their recent announcement. As SDX will fully integrate end-to-end trading with settlements and custody services, it will provide a safe way for digital assets such as cryptocurrencies to be both issued and traded. Digital assets that were previously untradable will be made open to investors and new users. SIX’s DLT-based ecosystem will provide a ‘bridge’ for clients from traditional finance to digital tokens and assets.
What challenges does SIX aim to address?
In the official media release, SIX’s Head of Securities and Exchanges, Thomas Zeeb, outlined a number of challenges currently facing digital assets such as cryptocurrencies. These include “a lack of accountability, transparency, stability, security and safety.” According to Zeeb, the main reason for these challenges is the “absence of regulation.” SDX will give digital assets the same level of oversight and transparency as traditional banking assets. The use of DLTs will provide digital assets with a safer environment, in which they are more stable.
How could SIX’s ecosystem change the cryptocurrency landscape?
SIX’s announcement that they plan to create a full blockchain-based ecosystem – SDX – has significant implications for the cryptocurrency landscape. SDX will be the first opportunity for investors to store digital assets with a Swiss-regulated FMI operator. SDX will provide asset safety, custody and asset servicing with a level of trust and transparency beyond anything currently available. Compared with existing cryptocurrency exchanges and companies, SDX will provide a far more “secure, stable and transparent” solution, according to the announcement.
SDX to launch services ‘by mid-2019’
SIX has announced plans to work with market participants in order to develop their business models for future opportunities. As SIX runs “the entire securities and payments value chain for Switzerland already,” it is uniquely positioned to help tailor services to businesses and participants. According to the media release, SDX aims to begin rolling out the first services by the middle of next year.