Russia’s National Settlement Depository (NSD) will be launching its own digital asset ledger next month. The project has been in the works since 2017.
According to new reports, the NSD will be unveiling its own security token blockchain next month. The Moscow Exchange Group subsidiary chose Switzerland to base their operations where the project will be incorporated as D3 (called the Decentralized Digital Depository).
According to Artem Duvanov, the head of innovation at NSD, Switzerland was chosen due to its blockchain-friendly regulatory environment. The country is one of the few in Europe to have laws specifically related to securities and tokenization.
D3 to Launch in June
D3 will track the ownership of various security token assets, largely from a few startups. All trading of Bitcoin and Ethereum on the exchange will be as depository notes, similar to the way stocks are traded in traditional U.S. markets.
The underlying structure of D3 will require ‘freezing’ BTC and ETH on public networks using a multi-signature smart contract.
“The idea behind D3 is a combination of the public network and a private network; slow public network and fast private network,” Duvanov said. “This method of holding them is distributed so there is no custody risk like if you store your bitcoins on an exchange.”
The next step for D3 after launch is enabling OTC trading without counterparty risk.
The news comes at a time when SIX, Switzerland’s own stock exchange exchange, said it would be focusing on security token offerings (STOs). SIX and now D3 may compel Swiss lawmakers to create more defined laws on this emerging industry, unique to all of Europe.
Do you believe D3 will be instrumental in legitimizing security tokens in Europe? Let us know your thoughts in the comments below.
Image courtesy of Coinfox.