Finance News

Swiss Change Receives Regulatory Approval to Supply Groundbreaking Digital Token Change

The SIX Swiss Exchange in Zurich, Switzerland.

Stefan Wermuth | Bloomberg via Getty Images

The SIX Swiss Exchange has received official approval to launch its long-awaited digital exchange.

The SIX Digital Exchange announced on Friday that it had received two licenses to operate an exchange and a custodian for blockchain-based securities from FINMA, the country's market regulator.

SIX said it is now in a position to put in place a regulated trading, settlement and custody infrastructure based on distributed ledger technology – also known as blockchain – the system best suited for its use in maintaining an immutable list of all cryptocurrency transactions is known.

The company plans to offer stocks and bonds in the form of digital tokens once the new exchange goes live. Thomas Zeeb, SIX Global Head of Exchanges, has indicated that the company could also offer tokenized versions of exchange traded funds, as well as other assets like art and real estate.

"That could take a little longer depending on where the banks are," he told CNBC in a 2019 interview.

SIX did not say when it expected the new product to be launched.

The digital exchange could provide a regulated alternative to cryptocurrency exchanges, many of which operate outside of the boundaries of established rules.

Binance, the world's leading crypto exchange, has faced multiple warnings and threats from authorities around the world. Coinbase, a regulated business, recently drew the wrath of the U.S. Securities and Exchange Commission.

SIX's launch of its new platform would put the company ahead of major exchanges like the New York Stock Exchange in offering blockchain-based securities, despite SIX saying it has no plans to support Bitcoin and other cryptocurrencies.

Move landmarks

Still, the approval marks a milestone in the world of cryptocurrencies, which are becoming increasingly accepted by several large companies and even an entire nation as their prices have risen.

PayPal, Square, and Mastercard are among the major financial companies that have offered digital currency support. El Salvador became the first country to adopt Bitcoin as legal tender this week, and on Thursday the Ukrainian parliament passed a law legalizing and regulating cryptocurrencies.

Moving from SIX would make them one of the first major exchanges to launch a digital asset exchange. The group announced plans to launch a digital exchange in 2018.

"I can't afford to do an Uber, it doesn't work," Zeeb said in 2019, referring to the ridesharing company's notoriety of starting in territories without first asking regulators for permission.

SIX Digital Exchange intends to continue investing in the development of its technology in the coming months. The company added that it hopes to attract clients such as banks, insurance companies and institutional investors and intends to launch its exchange network worldwide.

In a statement on Friday, Zeeb said, “This is an important milestone in bringing the digitization of capital markets into mainstream, but it's only the beginning. We will continue to work with our customers, regulators and other stakeholders to shape the markets "of the future."

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