In a bid to attract more investors, Swiss Stock Exchange (SIX) plans to introduce a blockchain-based trading platform that will tokenize traditional financial instruments like securities, SIX said on Friday. The new digital service will start in the middle of 2019 with no plans of trading cryptocurrencies but only using their underlying technology, the blockchain.
The SIX cryptoasset project aims to allow various market participants to develop their own business models within the platform, including the launching of Initial Coin Offerings (ICO).
The service will “enable the tokenization of existing securities and non-bankable assets to make previously untradeable assets tradeable”, SIX said. The platform will integrate trading, settlement and custody infrastructure.
The plannedtokenization project will be subject to the same regulations as SIX by the Swiss Financial Market Supervisory Authority (FINMA) andthe central bank, because the exchange’s owner is a registered financial market infrastructure (FMI) provider.
“The digital space currently faces a number of key challenges. These include the absence of regulation that ensures official safety, security, stability, transparency and accountability – all of which contribute to a lack of trust. The challenge is less in the trading of assets but rather in the custody and asset servicing, including asset safety,” Thomas Zeeb, head of securities and exchanges at SIX, said in a statement.
SIX plans first to enable the trading of existing bankable assets and at a later stage – of the non-bankable ones.
Last year, Australian Securities Exchange (ASX) announced a plan to use blockchain to clear and settle trades in a bid to save money. Developed as a distributed ledger technology (DLT), blockchain can reduce cost and speed up transactions. It also tracks and records all changes, ensuring more security and transparency.