Switzerland’s principal stock exchange SIX has pushed the launch of its fully regulated cryptocurrency exchange to 2020. Known as SIX Digital Exchange (SDX), the platform was set to go live this year but ran into regulatory hurdles. The SIX Group however announced that it had launched a prototype of SDX to showcase the future of financial markets.
The SDX prototype will help the SIX Group obtain feedback on the platform, the announcement stated. It will also demonstrate that a distributed central securities depository (CSD) “can be integrated with a central order-book stock exchange model to ensure fair market conditions for all.”
Initially, the platform will cover digital security token issuance, live trading and instant settlement through the use of a payment token. SDX will also offer access to a distributed portal which will make it possible to monitor transactions across specific DLT member nodes.
SDX users will execute their trades via a facility that resembles the existing Swiss Stock Exchange infrastructure. However, unlike the conventional exchanges, the platform will facilitate instant settlement that will remove counterparty risk. If the buy and sell-side have the necessary assets to fulfill a trade, the settlement will be instant.
Thomas Zeeb, the chairman of SDX remarked, “The launch of this prototype is a major milestone in creating a credible digital infrastructure for moving our industry forward. SDX is a testament to the innovative nature of the Swiss stock exchange and the foresight of its shareholders – we are combining existing market technology with revolutionary new technologies to create the market of the future.”
SIX had scheduled the launch of SDX for summer this year. However, according to a spokesperson who spoke to Reuters, the group is still working on legal and regulatory issues. The team behind SDX is also consulting some banks on which services to offer on the digital platform. Currently, the team is working with JPMorgan, Credit Suisse and Citibank. SIX believes that once it launches, SDX will be a huge success and that it will overtake its traditional trading platform within a decade.
SIX isn’t the only stock exchange that’s exploring blockchain, with the Santiago Stock Exchange recently becoming the first in Latin America to explore the technology. The London Stock Exchange has also been developing blockchain solutions that are geared towards greater transparency for financial markets.
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