In a quest to boost countries credentials as a “crypto nation” Switzerland’s stock exchange, Six has announced plans for its new market infrastructure which is designed to for cryptocurrencies such as bitcoin and will be based mainly on Blockchain distributed ledger technology.
Swiss exchange steals the lead
The platform is being built by the SIX exchange and will offer integrated post-transaction services such as deal settlement and asset custody. SIX, which is regulated by Finma, the Swiss financial nodal supervisor, and the Swiss central bank, said it expected its digital exchange would “enjoy the same standard of oversight and regulation.”
Jos Dijsselhof, Six’s chief executive, was quoted saying to FT
“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 financial industry now needs to bridge the gap between traditional financial services and digital communities.”
Thomas Zeeb, Six’s head of securities and exchanges, said the challenges for the digital sector lie “less in the trading of assets but rather in the custody and asset servicing, including asset safety.” Six would provide “all steps of the chain in an integrated and secure model”.
The first services are expected to be rolled out in the first half of 2019.
Growing competition from new entrants
Cryptocurrency exchanges slowly getting sophisticated are starting to traits the traditional exchanges commonly used for their securities and derivatives counterparts. But still are away from the established exchanges as there are still stream of hacks, asset thefts and technical issues surrounding crypto exchanges.
SIX sees this as a huge space for current exchanges to grow as they are equipped with technology which is more stable and secure. Management of SIX believes the institutional investors want to trade cryptocurrencies, hoping their experience in building high-capacity, secure systems will offer asset managers more reassurance.
Switzerland is trying to cover every gamut that can define it as a crypto nation. Zug is becoming a destination of a lot of crypto startups due to its regulatory and tax environment. Swiss politicians and officials are working on plans to remove obstacles which prevent conventional banks from providing services to crypto companies. Finma earlier this year set out guidelines to help local initial coin offerings, where start-up companies sell digital tokens to investors.
The Swiss exchange is rare in Europe in operating a major payments system alongside its traditional trading and clearing services.
Does Swiss Exchange really have an edge with an entry in crypto or the decision will backfire? Do let us know your views on the same.