The new Swiss digital asset exchange shows cryptocurrency’s future

Posted: 9 July 2018 11:20 am
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The world's first complete, regulated all-in-one digital asset system hints at the future of crypto.

On 6 July Switzerland's stock exchange, owned and managed by SIX, announced that it would be opening the world's first fully integrated end to end trading, settlement and custody service for digital assets like cryptocurrencies and tokenised securities – the SIX Digital Exchange (SDX).

The system is designed to provide a safe and complete environment for issuing and trading non-bankable digital assets, as well as tokenising existing securities and other assets.

"This is the beginning of a new era for capital markets infrastructures," said SIX CEO Jos Dijsselhof. "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."

A bridge between new and traditional markets

The SDX is designed to be agile, and able to continually update to meet the needs of a rapidly changing market. Its first services are expected to be rolled out in mid 2019.

The exchange will be a regulated financial market and will get the same standard of oversight and regulation as existing markets, under the Swiss National Bank and Swiss Financial Market Supervisory Authority (FINMA).

"What is going on in the digital space will define the future of the financial industry," the SDX site says. "The role of SIX Digital Exchange is to bridge the gap between traditional financial services and digital communities."

The line between crypto and currency

In the broader picture for cryptocurrencies, it's worth noting that this isn't a cryptocurrency exchange per se, as is being reported by many sites. It's not possible to say for sure, but it's probably never going to offer bitcoin or other decentralised currency-type digital assets.

Instead, it's designed as a digital extension for the existing banking system. It describes itself as putting "banks at the heart of transactions in the digital space" offering them "a solid foundation to pursue their business strategies for digital and tokenised assets".

Decentralised digital currencies like bitcoin will always have a niche. They can be used for illicit purposes, for legitimate privacy-centric transactions and uncensorable payments and as a hedge against the frequent political misadventures and economic mismanagement of centralised financial institutions that tend to periodically tank fiat currencies.

And in the less currency-focused platforms like Ethereum, decentralisation can be seen as a legitimate feature to allow for the creation of trustless and completely transparent applications, where needed. However, the bulk of the future of digital assets might lie in centralised and formally regulated tokens transacted through banks and other financial institutions.

Disclosure: At the time of writing the author holds ETH, IOTA, ICX, VET, XLM, BTC, NANO

Disclaimer: This information should not be interpreted as an endorsement of cryptocurrency or any specific provider, service or offering. It is not a recommendation to trade. Cryptocurrencies are speculative, complex and involve significant risks – they are highly volatile and sensitive to secondary activity. Performance is unpredictable and past performance is no guarantee of future performance. Consider your own circumstances, and obtain your own advice, before relying on this information. You should also verify the nature of any product or service (including its legal status and relevant regulatory requirements) and consult the relevant Regulators' websites before making any decision. Finder, or the author, may have holdings in the cryptocurrencies discussed.

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