The Blockchain Revolution: Traditional Exchanges vs. Digital Exchanges
In a bold prediction, Thomas Zeeb from the Swiss stock exchange SIX has argued that within the next decade, traditional stock exchanges could be a thing of the past. According to him, digital exchanges built on blockchain technology are not just a trend—they could completely overhaul how we trade stocks.
Why Blockchain?
Zeeb points out that the pivotal moment will occur when financial institutions—including brokers, banks, and asset managers—grasp the cost benefits of blockchain technology. With cryptographic codes swapping hands at lightning speed, savvy investors are already taking notice. The moment they realize they can save a bundle on transaction fees is the moment the digital switch flips.
SIX’s Digital Exchange: What You Need to Know
Launching in mid-2019, SIX’s digital exchange (SDX) aims to become an influential player in the world of blockchain. With plans to roll out trading in carefully selected stocks, followed by bonds and ETFs, the company is racing against the clock to tackle remaining legal hurdles with regulatory bodies like FINMA.
Preparing for Launch
- Clarifying legalities with Swiss authorities
- Ensuring compliance with financial market regulations
- Choosing stocks and assets to be initially offered
Crypto Exchanges: The New Titans
But wait! It gets juicier. Zeeb shared that the competition from pioneering crypto exchanges such as Binance and Coinbase has intensified the urgency behind this digital evolution. These platforms not only pose a threat to traditional exchanges, but they’re also out for blood—they could potentially skip over the banks entirely!
Switzerland: A Crypto-Friendly Haven
While traditional exchanges are bracing for change, the Swiss government has been sprucing up its legal framework to better accommodate crypto initiatives. Just recently, FINMA issued Switzerland’s first cryptocurrency asset management license, allowing a local crypto investment fund to offer new investment products linked to Bitcoin and other cryptocurrencies.
Learnings from Singapore
Across the globe, Singapore is not sitting idle. Their successful tests involving blockchain for tokenized asset settlements showcase how quickly global financial markets are evolving. Collaborations with Nasdaq and renowned consulting firms highlight a growing global consensus: if you’re not on the digital train, you might find yourself left at the station.
Takeaway
In conclusion, as blockchain technology continues to mature and gain acceptance among financial giants, the shift toward digital exchanges seems inevitable. Whether you’re a seasoned investor or a curious bystander, the next decade promises a remarkable transformation in how we view and interact with financial markets.
