Stuttgart Stock Exchange has launched BSDEX, a digital trading platform offering traders direct access to crypto assets. The exchange is setting the trend, and others will likely follow.

In January, we reported Stuttgart Stock Exchange was developing a crypto trading platform planned to launch in H1 2019. After some minor delays, the Digital Exchange of Börse Stuttgart (BSDEX) has now gone live. That makes Stuttgart Stock Exchange – which is the second-largest stock exchange in Germany – the first regulated exchange in Germany to offer crypto-trading directly to its customers.

BSDEX is operated by Börse Stuttgart Digital Exchange GmbH, which is a joint venture by Stuttgart Stock Exchange, Axel Springer, and finanzen.net. As the digital exchange is a separate entity to the company’s other financial services businesses, it meets the latest regulatory changes by the Bafin, which requires a legal separation of crypto- and financial services.

The platform’s functionalities and offerings will be expanded in the coming months

So far, crypto-trading was only possible via brokers in Germany. BSDEX enables traders to place orders directly on the exchange, which are then executed against the orders of other traders. For now, it is possible to set market- and limit orders. As a next step, BSDEX will add other trading-options to the platform. As it is standard on digital exchanges, trading on BSDEX is possible 24/7. 

As of now, the exchange only allows trading of one pair, Bitcoin-Euro. It plans on adding Ethereum-, Litecoin-, and XRP-Euro trading pairs this year and tokenized assets sometime in 2020. Traders do not need to open their own wallet, but only a trading account with BSDEX.

Boerse Stuttgart partnered with Berlin-based solarisBank on the initiative. The bank will process payments and custody euro funds. Custody services for digital assets are provided by blocknox GmbH, which is a subsidiary of Börse Stuttgart Digital Ventures GmbH.

BSDEX wants to become the leading European trading venue for digital assets

At this point, only selected investors can access the platform. In a subsequent step, BSDEX will open up for further investors.

Peter Großkopf, CTO at BSDEX, explains, “BSDEX will give retail and institutional investors direct access to digital assets and provide flexible and relatively low-cost trading. We believe blockchain is set to bring about significant changes in the financial industry, and we want to leverage its potential to create the trading venue of the future.”

While the platform will serve only German retail and institutional investors in the beginning, it will eventually open up for the entire EU. CEO Dr. Dirk Sturz said, “The market in cryptocurrencies is worth billions, and more digital assets will emerge on the basis of blockchain. Our goal is to build up the leading European trading venue for those assets.”

A functioning blockchain ecosystem needs regulated exchanges

It is paramount for the development of a large-scale blockchain market that regulated exchanges with global reputation offer crypto services. Stuttgart Stock Exchange has been a crypto-pioneer among the larger exchanges over the past years. One reason why Stuttgart Stock Exchange has leaped into blockchain is undoubtedly also the background and digital expertise of its senior management.

Other players have so far been rather slow in adopting the new technology, which is also due to a lack of regulations and legal certainty. With the German government recently moving ahead and taking a positive stance towards blockchain technology in its recently published blockchain strategy, it is likely that other exchanges will soon follow suit and launch with their digital platforms as well.

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