https://www.six-group.com/dam/images/media/image-videos/executive-board/thomas-zeeb-six-highres.jpg
- The owner of the Swiss stock exchange is building a digital asset trading platform.
- Thomas Zeeb, head of securities and exchanges at the company, talked to Business Insider about the project.
- The platform will mainly cater to ICO tokens — digital assets structured like ethereum that represent a stake in a project or business.
- Zeeb believes crypto tokens will one day be as mainstream as derivatives in finance and thinks they could be important in alternative investments, allowing people to tokenize things like art collections.
LONDON — The Swiss stock exchange's new digital asset platform is unlikely to offer cryptocurrency trading, according to the head of the project.
"Cryptocurrencies keep coming up. The capability is there to do it but to be honest, it’s not a priority. There are plenty of exchanges currently providing bitcoin trading services," Thomas Zeeb, the head of securities and exchanges at Swiss stock exchange owner SIX Group, told Business Insider in an interview.
SIX announced plans in July to launch the Swiss Digital Asset Exchange, or SDX, which will be one of the first fully regulated, mainstream exchanges for digital assets.
Zeeb said the new exchange will plug the funding gap between crowdfunding and IPOs. Usually, companies in this gap turn to venture capital or private equity. But 2017 saw a surge in so-called initial coin offerings (ICOs), in which startups issue their own digital tokens to raise money for a project.
ICO tokens can be freely traded via online exchanges that have sprung up in recent years. SIX want to provide a regulated and mainstream home for these assets so that institutional investors can feel safe investing in them.
"There is demand from institutional clients to find a way to legitimize and bring asset safety into play," Zeeb said.
"Our job is to bring capital to companies at the end of the day," Zeeb said. "That’s changing."
Zeeb said there are still "reputational" issues surrounding bitcoin and said he believes "there’s nothing behind bitcoin other than a lot of hope and hype."
"But let’s face it," he added, "whether you’re in a traditional or a digital market, there’s always been listings and securities you can name — US and Canadian penny shares, Australian mining shares — there have always been listings that are hugely risky, and in some other ways potentially problematic."
Tokenized art collectionsAs well as startups issuing their own tokens, Zeeb envisages existing securities or ETFs will be tokenized into digital assets to allow for fractional ownership, for instance. He also predicts that art galleries and other institutions that hold bundles of exotic assets may begin to tokenize their collections.
"In future, an art gallery or a museum may not be so dependant on public funding or their museum shop to get the funding but can actually tokenize a collection and people can trade and participate in a value increase based on a yearly or bi-yearly valuation based on auction results and that kind of stuff," he said.
"Why not? It’s a much more intelligent way for these guys to monetise and maintain an art collection."
As for investors, Zeeb believes ICO tokens and other assets will come to be another option in the toolkit of investment managers.
"We’re absolutely convinced [crypto is] where derivatives were in the early 90s and it’s not mainstream yet. In the early 90s derivatives were on the fringes, there were a couple of people who understood them, a lot of people lost money. Gradually, it got regulated, now every asset manager has derivatives as part of his toolkit.
"I’m absolutely convinced that digital assets, as well as a digitalisation of existing assets, is going to come a lot faster than the 30 years it’s taken derivatives to be everywhere. It will go in maybe five years."
'Digital assets are here to stay'SIX's digital asset project comes as other traditional financial market infrastructure providers look to crypto as a new growth market. ICE, the owner of the New York Stock Exchange, recently announced a project aimed at making it easier to spend bitcoin and the Stuttgart Stock Exchange is also working on an ICO platform.
"Everybody’s coming at it from a slightly different angle," Zeeb said.
"Are we at the vanguard or are we the guys leaning so far over the balcony that we’re going to fall off? I don’t believe that’s the case. I believe digital assets are here to stay."
Still, Zeeb cautioned: "Let’s wait for the implementations. You make an announcement, we’ve got an extremely good track record of delivering on our announcements, but the path is fraught with perils. The regulatory side is a significant one. That could affect us all and slow us all down."
NOW WATCH: Chase Cards CEO on the coveted Sapphire Reserve card and working with Jamie Dimon
See Also:
- The asset manager behind one of the first blockchain ETFs is preparing a $100 million crypto hedge fund even as the market sheds billions
- One in 2 ICOs failed in the 2nd quarter — and those that succeeded suffered huge losses
- Barclays traders say they're building out a crypto desk— but the bank says it has nothing in the works
DON'T MISS: One in 2 ICOs failed in the 2nd quarter — and those that succeeded suffered huge losses
