SIX and SBI Digital Asset Holdings unveil plans for Singapore-based joint exchange venture
SIX Digital Exchange (SDX) and SBI Digital Asset Holdings Co., Ltd., an SBI Group company, today announced their plans to work towards a joint venture to drive institutional digital asset liquidity through a Singapore-based digital issuance platform, exchange and CSD venue. The JV that is set to go-live by 2022 subject to regulatory approvals from the Monetary Authority of Singapore.
The contemplated JV announced by SBI and SIX is set to directly target the growing demand for public and private institutional digital assets, including regulated digital asset securities and cryptocurrency assets. The venture will market directly to regulated institutional clients , utilizing technologies from both companies to provide institutional grade services including issuing, listing, trading, CSD infrastructure and custody of digital assets and cryptocurrencies.
It will leverage the extensive networks of SIX Digital Exchange in Switzerland and Europe, and SBI in the Asian Marketplace, as well as their joint expertise in facilitating Institutional clients’ needs.
The companies note that ‘digital’ here refers to the creation of native Distributed Ledger Technology (DLT)-based assets that are represented on chain and where transactions and corporate actions are verified. This new shift in market dynamics aims to be the focus of the proposed Singapore-based venture that target these “core” markets rather than retail and pure-cryptocurrency plays.
The benefits of digital assets are becoming increasingly understood by leading global financial institutions, however, one of the key hurdles to market success is the availability of institutional digital market infrastructure to drive the formation of liquidity. The proposed joint venture aims to elevate institutional digital asset liquidity alongside providing offerings for digital asset servicing required in a number of ways.
For instance, middle-layer processes can be significantly reduced by the introduction of Digital Market Infrastructure (DMI), allowing for asset transactions from pre trade through post trade to have condensed processes, faster data transfer and verification as well as higher levels of transparency for all those handling the assets.
The contemplated venture is set to formalize Singapore operations in 2021, with ambitions to launch into market with active offerings by 2022 or earlier, with international connectivity to respective Swiss, Japanese businesses and other partnerships to follow.
The joint venture’s issuance, exchange and CSD platforms are targeted to be fully regulated by existing Singapore law. This is analogous to the regulatory path of SDX’s digital asset exchange and CSD in Switzerland under FINMA.
On December 7, 2020, SIX said it agreed to take a major stake in Custodigit and to partner with Swisscom, Switzerland’s leading telecoms & IT company, and Sygnum, the first digital asset bank to be formally recognized by Switzerland’s regulator, FINMA. Subject to the appropriate regulatory approvals, SIX Digital Exchange and Custodigit will provide a unique Institutional Digital Asset Gateway.