Business

Erik Gibbs

Swiss stock exchange to launch new blockchain-powered exchange

The SIX Swiss Exchange is the predominant stock exchange in Switzerland. It currently has a daily turnover of around 5.19 billion Swiss francs (about $5.18 billion) and a solid market cap of $1.6 trillion. The exchange has now decided that it’s time to embrace the future and has announced that it will begin testing the integration of a blockchain solution with a new digital trading platform it expects to release later this year. 

According to a report by Reuters, SIX’s new SDX trading platform is designed to make trading faster. The exchange will launch parallel to the company’s existing platform, which employs a cumbersome three-step process in order to complete a trade. In many cases, the process can take several days. 

By integrating a blockchain solution, two of the steps in the process can be eliminated, thanks to the use of a distributed ledger. Completion of a trade will go from several days to just “fractions of a second.”

Romeo Lacher, the chairman of SIX, spoke with Reuters during the Swiss Finance Institute conference this week, saying, “The supervisory board will probably decide (on the project) in late summer.” He added that the company is currently reviewing legal and regulatory issues with Switzerland’s financial markets watchdog, the Financial Market Supervisory Authority (FINMA). 

Once the new SDX platform is operational, it will eventually replace the company’s current solution, which could happen within the next ten years. While other exchanges, such as the Frankfurt Stock Exchange, have been considering blockchain integration, SIX is taking the lead and will show off the new technology in the second half of the year. 

In conjunction with that demonstration, SIX will launch its own Security Token Offering (STO). Whereas an initial coin offering (ICO) offers an investment against future performance, an STO allows an investor to purchase a stake in the company. 

Only a few select stocks will be available for trading when SDX first launches. However, the company plans on adding other stocks, as well as bonds and possibly exchange-traded funds (ETF) in the future. In addition, the company envisions a time when even non-security assets, such as vintage cars and paintings, are traded on SDX.

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