The prototype platform, launched under its digital assets subsidiary SIX Digital Exchange (SDX), is expected to see more functionality added as it approaches a full launch slated for Q4 2020, according to an announcement emailed to CoinDesk on Monday.
Swiss stock exchange SIX has launched a pilot version of its exchange and central securities depository (CSD) for digital assets.
The platform as it stands is aimed to “showcase the future of financial markets,” and as well as obtain feedback from early testers.
SDX further said it intends to show that a distributed ledger technology (DLT)-based CSD can “be integrated with a central order-book stock exchange model to ensure fair market conditions for all.”
Thomas Zeeb, chairman of SDX and member SIX’s executive board, said:
“The launch of this prototype is a major milestone in creating a credible digital infrastructure for moving our industry forward. We are now one step closer to demonstrating the viability of our vision for the financial markets of the future and, ultimately, for the way people and businesses access capital.”
Early functionality of the platform for “test cases” will cover issuance of digital security tokens, live trading and instant settlement.
“This will include the cash-leg of the transaction embracing the concept of a payment token as well as access to a distributed portal where it would be possible to monitor transactions across specific DLT member nodes.” according to the announcement.
SDX’s trading facility will be similar to the SIX infrastructure, while token issuance will utilize SIX’s Connexor reporting service and functionality.
Ultimately, SDX aims to enable instant settlement with no counterparty risk or requirement for default fund collateral at a central counterparty. “This implies that if the buy and sell-side have the necessary cash and assets to fulfil a trade, settlement will occur instantly,” said SDX.
Phase two of the prototype is expected to be ready in “coming months,” and will take in feedback from this initial phase. It will also add the first post-trade and digital custody functionality, according to SDX. Exchange users will be able to hold their assets on the SDX in a “distributed way,” with access through the use of a private key.
Swiss Stock Exchange Invests in Institutional Trading Platform for Digital Assets
SIX Swiss Exchange announced Tuesday it has formed a partnership with San Francisco-based institutional solution Omniex to provide SIX and its subsidiary, Swiss Digital Exchange (SDX), with access to cryptocurrency markets.
Thomas Zeeb, SIX head of securities and exchanges, as well as a member of the executive board, explained there was a “growing need” for platforms like SIX to have access to cryptocurrencies. The tie-up with Omniex will provide the stock exchange with a “standardized and secure gateway” in the emerging digital asset market, he said.
“With SDX as the digital exchange infrastructure in development, the collaboration with Omniex to deliver the front end for clients, both for existing crypto currencies, as well as in future for SDX-listed assets, is an important addition to the digital ecosystem,” Zeeb said in a statement.
As part of the agreement, SIX has also agreed to become a shareholder in Omniex for an undisclosed sum.
With a market cap of more than 1 trillion Swiss francs (just over $1 trillion) in January 2020, SIX is Switzerland’s principal stock exchange. It has listed a series of exchange-traded products (ETPs) that provide exposure to cryptocurrencies in a familiar and regulated tracker product.
SIX launched SDX in 2019 to provide a trusted cryptocurrency trading platform for both institutional and retail traders, but has since narrowed this down to just its professional clients. Although initially slated for the summer of 2019, a spate of departures at the executive level means the SDX launch date has been pushed back to the end of 2020.
Founded by former State Street executives, Omniex raised $5 million in a seed round in 2017. The company provides exchanges with the technology to ensure best-execution and minimal slippage when trading cryptocurrencies.
“Together with SIX we aim to offer an end-to-end solution for the trading and settlement of digital assets, including the SIX Digital Exchange (SDX), once operationally live,” said Omniex CEO and co-founder Hu Liang. “It will still take some time, but the cornerstones are in place to accelerate the broader adoption of natively digitalized assets.”