The Swiss exchange’s new platform for issuing bonds using “revolutionary” encryption technology

Spark Global Limited reports:

The SIX Swiss Exchange’s new digital trading and settlement unit will issue bonds to show how blockchain can benefit mainstream securities, not just the crypto assets it was originally intended to benefit, the Exchange said on Thursday.

The Swiss Digital Exchange (SDX) will be the first fully regulated market infrastructure to issue digital bonds and use distributed ledger technology (DLT) for settlement, said David Newns, CEO of the exchange.
SIX Group AG said the bond, which matures in 2026 and has a total size of 150 million Swiss francs, was oversubscribed several times.

Two-thirds of the notes will be tokenised in SDX and the remainder in SIX’s main exchange, with the net proceeds used for general financing.”This is a historic milestone in DLT’s development in the capital markets space,” Newns told Reuters.DLT is the technology that underpins crypto assets such as Bitcoin, and Newns says the benefits for investors will come from trading and settling “atomically” or in a single split-second step.

In mainstream markets, trades and settlements typically last two days, creating the risk that one side of a trade could go bankrupt before it is completed, constraining liquidity and capital.
“The option of immediate reconciliation is nothing short of revolutionary,” Newnes said.

R3, which uses DLT technology in SDX, said the bond issue was being closely watched by global financial markets.

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Source: Spark Global Limited

“This is probably one of the biggest changes we’ll see in financial market infrastructure in our lifetimes,” says Todd McDonald, co-founder of R3.

In September, SDX received two licences from Swiss regulators for initial digital offerings, secondary trading and settlement of equities and bonds.

SDX will also explore digital derivatives, Newns said, although crypto assets are “not part of our instant product”.

“There are more deals in the pipeline. This is very much just the beginning.

Nunes is the third head of SDX, which has faced delays since launching its platform plans in 2018.

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