SIX Swiss Exchange records around CHF 5.2 billion (~$5.1 billion) in daily trading volume and has an enterprise value of over CHF 1.67 trillion ($ 1.6 trillion).
As earlier revealed, in July 2018, SIX revealed plans to introduce a digital asset ecosystem, named Six Digital Exchange (SDX).
Thomas Zeeb, head of securities and derivatives and director at SIX, disclosed in an interview that the exchange’s plans will cover indigenous digital apps that require the introduction of unique tokens alongside an original digital offering facility.
Zeeb expected a service trial starting late summer with a live roll-out by early 2020.
The executive outlined the platform’s broader ambitions, stating:
Zeeb said “We’re expecting [to launch the token] by 2021. A prerequisite is to have an appropriate regulatory environment in place. Whether we’ll have this by then will be critical. As we test the first phase early next year, along with the regulatory dialogue, we’re building a bridge to the second piece. That’s when the magic really begins to happen.”
Regarding tokenization, Zeeb said “Ultimately we want to be able to tokenize existing securities — equities, fixed income, funds. Maybe the token will eventually replace the share one day.”
Since clearing legislative obstacles is crucial, Zeeb suggested that guessing legislative dialog moves forward productively, tokenized securities could turn into a reality by 2021. The CEO maintained more discretion for cryptocurrency trading per se, highlighting the trouble in maintaining adherence with anti-money laundering and know-your-customer laws:
Regarding the legal issues, Zeeb said “The fatal flaw in trading cryptocurrency is not knowing who’s behind the trades and where the coins are coming from – by design […] The way bitcoin is currently set up and traded, it wouldn’t meet the criteria for SDX.”
If AML / KYC issues are addressed, Zeeb said that SDX could well strive to create connectivity with a crypto exchange platform in order to deliver customers entry to a genuine cryptocurrencies liquidity pool.
Regarding banks’ concern over releasing tokens, Zeeb said that certain banks are historically not first-movers and content waiting to see how it works, others want to lead and impact future developments ZEEB revealed that some businesses have roped in up to 20 individuals in its firm to engage with the employees and build simultaneously in their own organizations.
On the future of the initiative, Zeep clarified that SIX intends to tokenize current securities — equities and fixed income funds. The token may inevitably substitute shares someday. Zeep said there’d be a need to freeze and isolate shares in one location to issue tokens.
Then again decommission tokens and return the share, based on where demand is needed. Noting that the SDX project needed a considerable double-digit million”funding both in 2018 and this year, Zeeb said he anticipated the firm to retain “at least ten years” of both its classic and electronic trading infrastructure until conventional counterparties develop and upgrade their own mechanisms.
While responding to a question about running two infrastructures (traditional platform and blockchain-based token trading system) Zeeb said SIX anticipates running the service for at approximately ten years. Achieving adequate volumes on SDX will take etween five and seven years to justify a debate on decommissioning conventional facilities.
Banks and other market participants must adapt their legacy models to the electronic world and each will do so in their own investment lifespan.
SDX aims to increase the number of employees from 70 to 100. SIX Swiss Exchange is regarded as a main player in the crypto sector in Switzerland. SIX reported a sophisticated multi-crypto-based exchange-traded product (ETP) in spring 2018, tracking five significant cryptocurrencies, alongside continuing SDX advancement The ether (ETH)-based ETP also started trading this March.
Again in March, SIX disclosed its decision to use R3’s blockchain alliance Corda Enterprise platform for the upcoming SDX exchange.