SIX Group to Tokenize Equity on R3 Blockchain

The Swiss stock exchange operator SIX Group is building a digital asset, custody and settlement service and it has chosen R3’s Corda Enterprise Blockchain on which to build it. The exchange is to be called SIX Digital Exchange (SDX).

Why Choose Corda?

SIX stated in an exclusive interview that it had assessed various DLT (distributed ledger technology) stacks and had finally chosen Corda Enterprise. The company said it had done so for several reasons.

First, Corda Enterprise’s R3 technology had been developed for an extremely regulated space. Second, because the platform’s open-source ecosystem was flourishing. SDX’s Chief Digital Officer Sven Roth stated another factor that influenced their decision was that Corda Enterprise spanned areas beyond capital markets such as insurance. Added to this the R3 platform also expanded to aspects like identity.

Roth stated that when they assessed other vendors, some were focused on niche offerings and were limited to very specific areas. He said that their company did not want to be limited to just one area of expertise.

Creating a Regulated Exchange Platform

Roth said that SDX would be launched in the later half of 2019 and would first start with traditional bankable assets like bonds, equities, funds and other structured products that were already on their DLT. However, later, the company would expand to other tradeable instruments and would even look at tokenized versions of physical assets like fine art.

SDX is also looking at handling STOs (Security Token Offerings). In fact, the Chairman of SIX Romeo Lacher stated that the exchange was planning to raise funds through an STO. However, further details of this aspect of the project were not available.

A Big Win for R3

It is a big win for R3 that SIX chose Corda Enterprise, the paid version of the platform, rather than Corda, the original open-source platform. A managing director at R3, Charley Cooper stated that it was important that a mainstream financial market infra institution like SIX had chosen Corda Enterprise to launch a digital assets exchange.

Cooper stated that this proved that their company was on the right track with its built-for-business approach. He said that the traditional old-style public Blockchain would not work for highly complex and strongly regulated markets as well as participants. This is traditional public Blockchains still faced issues around scalability as well as privacy.

The managing direction also pointed out that many of R3’s clients were already trading on the SIX stock exchange and were ready to leverage the combined technologies.