SIX, the financial services provider that operates the infrastructure of the Swiss Stock Exchange, is building a fully integrated trading, settlement and custody infrastructure for digital assets. The first set of services will be rolled out in the first half of 2019, the firm said on Friday.
The move aims to position the firm as a pioneer in the digital asset trading industry as it will make it the first established, regulated financial player to set-up such an exchange.
The planned “digital asset ecosystem,” called SIX Digital Exchange, intends to meet market demands for a safe and regulated venue for issuing and trading of digital assets. Mainly based on distributed ledger technology (DLT), the platform will also allow for the tokenization of existing securities and non-bankable assets, making previously untradeable assets tradable.
SIX claims it will be the first market infrastructure in the world to offer a fully integrated end-to-end trading, settlement and custody service for digital assets.
“This is the beginning of a new era for capital markets infrastructures. For us, it is abundantly clear that much of what is going on in the digital space is here to stay and will define the future of our industry,” said Jos Dijsselhof, CEO of SIX. “The financial industry now needs to bridge the gap between traditional financial services and digital communities. This is the role that we at SIX can play.”
The fact that SIX runs the entire securities and payments value chain for Switzerland, makes it ideally positioned to create “the digital ecosystem for the future,” Dijsselhof said. “These are strengths that we can bring to the digital space and contribute meaningfully to what is one of the most innovative and dynamic environments of our time.”
According to Thomas Zeeb, the head of securities and exchanges at SIX:
“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. Do you adopt a model with many sub-custodians, including inefficient interfaces and with inherent risks, or do you go with a recognized and regulated infrastructure provider who provides all steps of the chain in an integrated and secure model? We believe that the latter has significant value.
“As the stock exchange infrastructure for Switzerland, we know what it takes to build and run mission-critical and scalable, systemically important services.”
Earlier this year, SIX joined hands with a group of other stock exchange operators and financial-information transmission service Swift to explore the use of blockchain technology in post-trade scenarios, such as corporate actions processing, including voting and proxy-voting.
SIX is also part of another blockchain project with UBS, Credit Suisse, and Barclays, among other partners, that aims to improve the quality of counter-party reference data with industry counterparts using Ethereum smart contracts.