BX Digital Gets Approval To Launch DLT Trading Venue

BX Digital, a Swiss company under Boerse Stuttgart, has received approval from the Swiss regulator FINMA to launch a new trading platform for digital and tokenized securities. This platform will use distributed ledger technology (DLT) and will start once certain conditions are completed. BX Digital is also connected to BX Swiss, a traditional exchange.

BX Digital Provides A Blockchain-Based Trading System

The new platform will allow users to trade digital assets such as stocks, bonds, and funds using a public blockchain. At first, it will operate on Ethereum. The platform will also connect to the central bank for settlements, using a delivery versus payment (DvP) system. This method removes the need for a central securities depository (CSD), making transactions more direct and efficient.

Switzerland introduced laws for DLT trading venues in 2021, but BX Digital is the first to fully use these rules. SIX Digital Exchange (SDX) has already issued CHF 1.5 billion in securities, but it operates under traditional licenses for a CSD and securities exchange. Unlike SDX, BX Digital will use a permissionless blockchain for its operations.

Andreas Ruflin, Chief Digital Officer of BX Digital, said the company is excited to launch a new kind of financial market system. He explained that using a public blockchain will help improve market efficiency and support the growth of digital assets.

Boerse Stuttgart has tested a similar system in another country when it joined the European Central Bank trials for DLT settlement. Germany has its own rules for issuing digital securities, but secondary trading still follows existing laws. The European Union’s DLT Pilot Regime provides some flexibility, but many companies have been cautious about using it.

BX Digital Gains Strong Interest From Banks And Issuers

There is a lot of interest in the platform, according to Lucas Bruggeman, chairman of the board of BX Digital and leader of the BX Swiss Exchange. He pointed out that banks and issuers are among the partners that BX Digital has already drawn in, and they are enthusiastic about the new financial market structure.

However, BX Digital will not be open to retail investors. A spokesperson said the platform is focused on banks and investment firms that want to offer digital assets to their clients. Through this approach, BX Digital hopes to reach both retail and institutional investors indirectly.

The future of central securities depositories in a digital world is not yet clear. Many institutions depend on them for trading, and removing them could add more steps for those involved. BX Digital plans to operate without one, but the change may take time.