SIX exchange is now launching a digital trading platform and plans to conduct a Security Token Offering (STO) in the latter half of 2019. Initial trading is likely to include stocks, bonds, and funds, while future plans include assets outside the traditional securities domain.
Details of Swiss Exchange SIX Launching STO Explained
Switzerland-based SIX exchange is turning to blockchain technology and launching the SIX Digital Exchange (SDX) in the second half of 2019.
According to SIX Chairman Romeo Lacher, SDX will first run parallel to the SIX platform— which currently requires three steps to complete trades. These steps can take up to several days.
With the integration of blockchain technology, two of those steps vanish, and a transaction can be completed in less than a second.
When referring to potential regulatory concerns, Lacher told media that “the supervisory board will probably decide [on the project] in late summer”.
Lacher also commented on the initial plans of SDX:
“We want to start with our own Security Token Offering.”
How SDX Plans to Integrate Security Tokens and Blockchain-based Assets
Security Token Offerings (STOs) differ from Initial Coin Offerings (ICOs) insofar as STOs openly declare themselves securities. Therefore, while ICOs have been consistently surrounded by regulatory ambiguity, security tokens bear no such caution.
Securities such as equity in both Europe and the United States have already undergone tokenization.
SIX is not alone in entering the security token space. JPMorgan recently launched their own cryptocurrency which features a primary use-case involving the real-time settlement of securities transactions.
Reports suggest SDX is likely to offer the trade of stocks, bonds, and funds. In the future, officials emphasized the potential for additional high-valued assets— to include fine art or vintage cars— to be traded on the platform as well.
SIX is also not the first in this sector. Famous art work such as a Picasso painting, investment funds, REITs, and real estate have all become tokenized.
While most stock, bond, and asset trading on the majority of today’s exchanges include electronic functionality, the underlying processes are obsolete. They continue to include archaic protocols involving paper and even post.
With blockchain, security and transparency of asset ownership no longer requires such outdated processes.
What do you think of plans for the SDX platform? Will other traditional trading platforms follow the emerging pattern of a transition to blockchain-based assets? Let us know what you think in the comments section below.
Image courtesy of SIX.