Thomas Zeeb, head of securities and exchanges for Swiss stock exchange (SIX), has been talking about its planned digital exchange. Speaking to finews.com, he explained how far along the SDX (SIX Digital Exchange) is, and why cryptocurrency trading is out.
Cryptocurrency Trading Is Out? But I Thought…
We all thought… even SIX initially suggested that the platform would include digital currency trading. However, it quickly rephrased itself, stating there was not yet a final decision on whether to include existing non-security tokens.
A more solid indication of plans for the SDX came earlier this year when SIX suggested that it would launch its own token.
There are now no plans to allow cryptocurrency trading on the platform at all. The problem, according to Zeeb, is knowing who is behind the trades and where the coins are coming from.
We have responsibilities in terms of ensuring that appropriate anti-money laundering and transaction monitoring processes… are in place. The way bitcoin is currently set up and traded, it wouldn’t meet the criteria for SDX.
On the possibility of linking up with a cryptocurrency exchange at a later stage, Zeeb said that it would require a legitimate liquidity pool for cryptocurrencies. This would have to be fully know-your-customer and know-your-coin compliant before SIX could consider such a move.
So, What Exactly Will This Platform Do?
SIX will deliver the pilot digital exchange in late summer, with the first services going live in early 2020. Initially, it will focus on native digital applications: i.e. the launch of tokenized structured products, and its own Initial Digital Offering (IDO). All new-launch tokens must fulfill similar standards to an existing IPO.
As an infrastructure, we want to ensure we set the standard and that existing rules around asset safety and investor protection are maintained.
Following this (Zeeb expects by 2021), SIX wants to be able to tokenize existing securities, perhaps even replacing the share one day. Although this will rely on the regulatory framework being put in place.
In the longer term, when banks and other trading counterparts have updated legacy systems and processes, Zeeb sees the potential for decommissioning the traditional (non-digital) infrastructure altogether.
Will SIX succeed in launching its own digital tokens this year? Share your thoughts below!
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