SIX Swiss Exchange Hopes to Replace Current Trading System with Blockchain in 10 Years
SIX Swiss Exchange might fully integrate a blockchain-based trading system within the next ten years, executive says.
SIX Swiss Exchange, which is Switzerland’s leading stock exchange, might replace its existing trading platform with a blockchain-based system that the company is currently working on, Reuters reports. Even though all the operations with stock and bonds are carried out digitally, the processes behind these are often relying on paper-based protocols.
Thomas Zeeb, who leads the company’s securities and exchanges unit, told Reuters:
“The existing system could be completely replaced by the digital exchange in about 10 years.”
SIX Digital Exchange (SDX) is the company’s new product, which is planned to be launched next year. Initially, it will operate in parallel to the current SIX platform. The latter requires three basic steps to conduct a securities deal, which often takes up to several days. By adopting a distributed ledger technology (DLT) system, the Swiss stock exchange operator can provide a one-step transaction solution.
“The moment that brokers, banks, insurance companies and big asset managers really see the cost advantages, they’ll move relatively quickly,” Zeeb added.
The SIX Swiss Exchange is not the only stock exchange to implement blockchain solutions. Similar providers include the Deutsche Boerse and the Australian Securities Exchange (ASX). However, SDX wasn’t inspired by these stock exchanges but rather reacted to threats coming from startups like Coinbase or Binance that have gained millions of customers within months.
“They are pushing into our business and especially the banks ... That’s a big danger,” the SIX executive noted.
The intention to build a blockchain-based trading platform was first announced in July of this year. SIX is still trying to get the green light from the Swiss Financial Market Supervisory Authority (FINMA) and the local government.
When ready, SDX is expected to provide trading services for company stocks, bonds, and probably exchange-traded funds (ETFs), Zeeb revealed. Even non-securities assets, like art and luxury goods, could one day be traded on SDX. Also, the platform will enable businesses to launch initial coin offerings (ICOs).