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Switzerland's stock exchange may issue its own tokens as part of a plan to digitize assets. Top executive Thomas Zeeb tells finews.com that tokens may eventually replace stocks and bonds, and what role cryptocurrencies play.

How far in are you in building a digital exchange in Switzerland?

This year, we’ll deliver a pilot in late summer and first services will be live in early 2020. We will start with so called native digital applications – launching new tokens and an initial digital offering (IDO) service.

What type of tokens?

We’ve got a number of organizations which want to launch tokenized structured products, real estate funds, and so on. But it could also be our own IDO. Whether we begin with warrants, structured products, funds is up to our clients to decide. That is currently being finalized with our user-owners.

What hurdles need to be cleared by token issuers?

An IDO needs to fulfill similar standards as an IPO. You can’t just do an ICO whitepaper, hype it up a little bit, and then launch. As an infrastructure, we want to ensure we set the standard and that existing rules around asset safety and investor protection are maintained.

Where does the project go after that?

Ultimately we want to be able to tokenize existing securities – equities, fixed income, funds. Maybe the token will eventually replace the share one day. We would need to be able to freeze and segregate shares in one place in order to issue tokens. Then in turn to decommission tokens and release the share again, depending on where demand is required.

When will you be able to do that?

We’re expecting by 2021. A prerequisite is to have an appropriate regulatory environment in place. Whether we’ll have this by then will be critical. As we test the first phase early next year, along with the regulatory dialogue, we’re building a bridge to the second piece. That’s when the magic really begins to happen.

How active are the banks– your member-owners – in this process?

There are huge differences. Some banks are traditionally not first-movers and comfortable waiting to see how it goes, others want to be at the forefront, and influence the changes to come. Some companies have put up to 20 people into our shop to work with our people in order to develop in parallel in their own organizations as well.

SDX (SIX Digital Exchange) doesn’t plan to trade cryptocurrencies at all. Why?