Traders and investors are getting increasingly interested in digital assets and the benefits of digitized and automated trading infrastructure. Exchange operators in Europe are speeding up their efforts to satisfy the increasing demand.
A survey by Swiss stock exchange SIX among its traders found an overwhelming interest in digital assets. The survey asked 126 traders across Europe about their opinions on digital assets. 80% believe that the demand for digital assets will increase.
41% percent of traders also said they were noticing interest in digital assets from their client base, with 13% saying they received “high levels of interest.” Many of the survey respondents also believe digital assets will improve the current trading infrastructure and settlement processes as well as reduce transaction costs.
SIX aims at satisfying this demand with its SDX venture: The digital asset trading platform allows for near-instant settlement of trades, eliminates the risk of payment defaults, and reduces costs by avoiding the services of a central counterparty. At least theoretically, because SDX has not yet gone live. According to Reuters, SIX Group plans a full launch of the SDX trading platform by the end of this year. If SDX can deliver on its promises, traders are likely to flock to the new platform.
Tony Shaw, Executive Director at SIX, says, “The Swiss Stock Exchange is already making significant headway in digital assets, as the world’s leading regulated marketplace to trade products with crypto-currencies as underlyings.”
An Evolving Ecosystem: Europe is going digital
SIX’s survey shows: There is demand for digital assets from both traders and their clients.
SIX also announced plans to list tokenized shares of Nestle and Novartis on SDX. While the initial focus of the platform was on large corporations, SIX has recently acquired shares in the SME share registry and tokenization firm daura, which belongs to Swisscom. This move aims at widening the target audience to provide a broader digital ecosystem including SME clients.
Switzerland and its neighbors are competing for the pole position in the race for a digital ecosystem. Stuttgart Stock Exchange, the second-largest stock exchange in Germany, has launched a digital trading platform last year. For now, it only offers cryptocurrency trading, but other digital assets including Security Tokens are planned for release later this year.
Likewise, Liechtenstein-based LCX is currently applying for an OTF/MTF license under MIFID II and a banking license according to the Liechtenstein Banking Act.
Still, Switzerland doesn’t have to shy away from its competitors. The country has today one of the most advanced digital ecosystems. Besides the SDX project, there are also four crypto banks to provide dedicated banking services to crypto clients; two of them have already received a banking license from the financial regulator Finma. The Swiss central bank has launched a pilot with SDX to explore the integration of a digital Swiss franc into the trading ecosystem and the government has recently proposed amendments to laws on blockchain and DLT technology.
Besides all of this, the launch of SDX could finally give Switzerland’s ecosystem a significant edge of other countries.