Deutsche Boerse has stolen a march on Switzerland's stock exchange with a blockchain tie-up. The move widens the Frankfurt exchange's trading universe and promises the Swiss partner a rapid expansion, finews.com has learned.
Deutsche Boerse's swooping in on a Swiss blockchain project raised eyebrows in Switzerland's crypto and banking communities. The exchange is joining up with Sygnum, a Swiss and Singaporean crypto firm which aims for a banking license, and Swisscom in a Swiss-German partnership revealed on Monday.
Frankfurt-based Deutsche is understandably pleased about stealing a march on its Swiss rival, SIX: «We're convinced of the cooperation because the partners are bringing very complementary skills into the project, but the same views on process and potential of digital assets», Deutsche Boerse's Jens Hachmeister told finews.com.
The comments from Hachmeister, who is responsible for blockchain technology at Deutsche Boerse, allude to a contrasting approach from the SIX, which wants to trade, settle, and store digital assets – just not cryptocurrencies.
Beyond Swiss Borders
The three partners are currently launching Daura, a platform for small- and mid-sized issuers to raise capital with crypto shares on the blockchain. They are also in the process of building a digital securities platform, and are looking even further into the future, Hachmeister said.
«As one of the leading European financial infrastructure providers, we would like to vault the project to the level of all 27 European Union member states», he said. «It is our goal that the ecosystem is not limited to Switzerland and Singapore».
The move lends Swisscom and Sygnum, one of several firms gunning to be the first Swiss «crypto bank», the means to expand outside of Switzerland – in keeping with the digital business model of blurring geographic boundaries in search of volume.
No Monolith
Even if the Swiss partners in the venture emphasized on Monday that they are speaking to everyone, the limited growth potential that SIX can offer could be one reason the Swiss exchange didn't clinch the deal. SIX's Swiss Digital Exchange, or SDX, which plans to launch later this year, is largely an effort to extrapolate existing business onto the blockchain – a bridgehead between traditional and new infrastructure.
Swisscom, Sygnum, and Deutsche Boerse are setting a different focus: their approach is to lure new players and asset classes into their digital ecosystem. «We're not planning a monolith just for its own sake», Hachmeister said.
Odd Offshoots
In fact, the German exchange's incentive to join up is a potential massive boost of business: part of blockchain's allure is to provide a trading venue for digital assets. The rights attached to a coin which can be bought and sold online has odd offshoots: a Grison tourism firm is transferring a digital «microshare» to users who buy a ski pass, for example – via the Daura solution.
«As a stock exchange, we're interested in tapping new asset classes for trading and building the appropriate infrastructure to regulatory requirements», Hachmeister said. He views real estate or private market investments as transferrable to blockchain, as well as over-the-counter instruments from Germany's «Mittelstand» – all in an ecosystem for which the German exchange has clinched first access.
