Switzerland’s main stock exchange SIX is planning to incorporate blockchain technology into its operations to speed up trading.
The new blockchain-powered platform, SIX Digital Exchange (SDX), is designed to offer customers a “fully integrated end to end trading, and settlement and custody service for digital assets”.
SIX Digital Exchange Blockchain Platform
According to reports, SIX is looking to provide its customers with an improved trading experience by bringing blockchain integration to its new Six Digital Exchange trading platform. The aim is to leverage the benefits of blockchain technology to ensure the highest speed of trading transactions.
Currently, transactions on the SIX exchange takes several days to complete, as the request has to go through a three-step process before it is completed. But with the implementation of blockchain distributed ledger, two of these steps will be eliminated. This will not only speed up the process, it will also ensure that a transaction approval takes only a few seconds to complete.
The SDX platform, which will run in parallel to the existing Swiss exchange, is expected to be released in the second half of this year. However, SIX was quick to point out that SDX could outperform its predecessor fairly quickly.
Navigating Regulatory Requirements
The SIX Digital Exchange blockchain solution will no doubt bring numerous benefits to stock trading and settlements. However, it is still a long way to go before the launch is possible, as the company has yet to resolve some legal and regulatory issues associated with stock trading. The company is also waiting for the final approval by the Swiss Financial Market Supervisory Authority and Swiss National Bank. Once all these legal procedures are settled, the SDX platform will be allowed to go live.
Meanwhile, SIX Exchange Chairman, Romeo Lacher, revealed that they are planning to issue security token offering (STO) to allow investors to get an equity stake in the platform in exchange for capital. STO are similar to ICO except that instead of offering utility in the form of future products or services, STO offers a stake in the company.
It is believed that SDX will initially offer trading of selected stocks before expanding the list of offerings to other stocks and additional products such as bonds and exchange-traded funds. It is also likely that in the future the SDX platform could enable trading of assets that are not securities, such as paintings and vintage cars.