Switzerland’s primary stock exchange Zurich-based SIX Swiss Exchange is exploring the potential integration of blockchain technology in its new digital trading platform SDX, slated to be launched in the second half of 2019, Reuters reported February 5.
As it stands, SIX Swiss Exchange generates an estimated $5.18 billion daily revenue, with a total market capitalization valued at $1.6 trillion.
Explaining the company’s impetus for testing blockchain’s integration, CEO Jos Dijsselhof noted that the nascent technology was chosen largely for its massive potential to improve security and efficiency in facilitating stock trading and settlements, stressing that:
“The fact is, it takes two days for the buyer of a stock to become the owner. The trade itself only takes a fraction of a second, but after that payments have to be settled and titles transferred. If we put it all on our digital exchange, then the whole process takes only a few seconds. This makes the market more efficient, but at the same time also takes risks out of the system.”
According to Dijsselhof, not only will blockchain minimize the multiple risks associated with stock trading but will also broaden the range of tradable titles. As he further highlighted, SIX Swiss aims to create “a whole new stock market on the blockchain with completely integrated trading, handling and custody of digital assets.”
To that end, SIX Swiss Exchange is expected to launch its blockchain-based digital trading platform this summer, albeit the precise date has yet to be finalized pending legal and regulatory inspection by the country’s market regulator the Financial Market Supervisory Authority, said SIX exchange chairman Romeo Lacher.
As Lacher further noted in the report, SIX is expecting SDX to supplant the stock exchange’s existing marketplace in the next ten years, with plans of launching a proprietary Security Token Offering, in an effort to provide investors an equity stake for their capital investment. According to multiple undisclosed SIX officials, SDX will be initially supporting a number of stocks, later expanding to selected bonds, possibly even exchange-traded-funds (ETFs).
In November, SIX has listed the world’s first exchange-traded product (ETP) that tracks five of the crypto market’s leading digital assets.
SIX Swiss Exchange follows a slew of other major global exchanges exploring the potential integration of blockchain technology in an effort to revamp their platforms, among which includes Germany-based exchange organization Deutsche Börse which has recently partnered with R3 last month to integrate the firm’s open-source blockchain technology into its securities lending platform.