Thomas Zeeb, head of securities trading at the Swiss Stock Exchange, has been talking about its planned digital currency exchange. In an interview with finews.com, he explained the efforts of SDX (SIX Digital Exchange) in this regard and the reasons for the cryptocurrency transaction to exit the exchange.
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Prohibit cryptocurrency transactions? But I think…
We all believe that the SIX platform will offer digital currency transactions, even the original plan. However, the exchange quickly changed its wording, stating that there was no final decision on whether to include existing non-securitisation tokens.
Earlier this year, the SIX platform hinted that it would launch its own token, which is a firmer indication of SDX's plans.
Thomas Zeeb said that the exchange has no plans to allow cryptocurrency transactions on the platform because the source of these tokens is not well controlled.
“We are responsible for ensuring proper anti-money laundering and transaction monitoring procedures. It does not meet the SDX standard in accordance with Bitcoin's current settings and trading methods.”
Regarding the possibility of establishing contact with cryptocurrency exchanges at a later stage, Zeeb said that this would require a legal pool of cryptocurrency liquidity funds. Before SIX considers this initiative, it must fully meet the requirements of "know your customer" and "know your token."
So what exactly is this platform going to do?
SIX will launch pilot digital trading in the late summer, and the first batch of services will be launched in early 2020. Initially, it will focus on local digital applications: the introduction of token-based structured products and its own initial digital products (IDOs). All newly issued tokens must meet similar standards as existing IPOs.
“As an infrastructure, we want to ensure that we set the right standards and maintain existing asset security and investor protection rules.”
After that (Zeeb is expected to go to 2021), SIX hopes to be able to tokenize existing securities and even replace stocks one day. Although this will depend on the regulatory framework being implemented.
In the long run, when banks and other counterparties renewed their traditional systems and processes, Zeeb saw the potential to completely phase out traditional (non-digital) infrastructure.