SIX Group, owner of the Swiss stock exchange, is set to release a fully regulated digital assets platform known as the Swiss Digital Asset Exchange.
The new platform – which will serve as an avenue for raising funds for startups – is designed to fill the niche between initial public offerings and the crowdfunding space.
In a conversation with Business Insider, SIX Group’s head of securities and exchanges, Thomas Zeeb, explained why the company did not instead go with a crypto trading platform. According to Zeeb, SIX Group did not prioritize the creation of a trading platform because there are so many of existing exchanges are already serving that purpose.
The target clients are expected to be startups that would otherwise have opted for funding from venture capital firms or private equity. The Swiss digital assets exchange is designed to serve the needs of such clients with its platform.
The idea is that institutional investors would patronize the service since they are likely to be more comfortable with a regulated and mainstream digital asset platform, as Zeeb explained:
There is demand from institutional clients to find a way to legitimize and bring asset safety into play.
“Bitcoin is All Hope and Hype”
Surprisingly, Thomas Zeeb did not have too many positive remarks to make about Bitcoin, which in his opinion, had little backing it and does not have a good reputation.
This was, however, no reason to avoid getting involved with digital assets since they were “here to stay”. Zeeb believes Bitcoin, ICOs, and other digital assets could become just another option for asset managers as they become more regulated and penetrate the mainstream.
To drive home his point, Zeeb explained that derivatives were not mainstream financial instruments in the early 1990s. With more regulation and understanding of what the asset class was, they have become well-known and commonly used assets in the traditional market.
He added that the traditional market also had securities that could be considered risky and problematic:
Whether you're in a traditional or a digital market, there's always been listings and securities you can name US and Canadian penny shares, Australian mining shares… there have always been listings that are hugely risky and in some other ways potentially problematic.
Tokenization Securities and Exchange Traded Funds
Zeeb also mentioned that he could foresee the tokenization of already existing exchange-traded funds (ETFs) and securities.
Using art galleries and museums as examples, he argued that collections could be tokenized with the value of the tokens determined by things like auction results. This, he believes would enable these organizations to survive without government support.