It's been a busy couple of weeks for the SDX digital asset exchange located in Switzerland. Last week, SDX's parent company, SIX, announced results of tests on the "feasibility" of wholesale central bank digital currency (CBDC), involving the Swiss National Bank (SNB) and the Bank for International Settlements (BIS) .
This week, SDX acquired a stake in the crypto-custody solution Custodigit with the aim of building a “digital asset gateway” in Switzerland. Again this week, SDX said it is partnering with Japanese bank SBI to build a digital asset exchange in Singapore by 2022.
However, this latest announcement was preceded by DBS Bank announcing its digital asset exchange, partly owned by the Singapore exchange SGX, which will begin trading next week.
Asked whether each exchange's plans led to some sort of judicial rivalry over digital assets, Tim Grant, head of SDX, was philosophical. "We think of collaboration as a key way to keep the industry competitive while cultivating the digital asset cake."
The partnership between Switzerland and Singapore
Rivalry may not be the right word. Some might say that we are witnessing the strengthening of a crypto chain linking Switzerland and Singapore. Swiss-regulated crypto banks such as Sygnum, which is part of Custodigit, also have a solid base in Singapore.
Likewise, FINMA-licensed SEBA Bank has already been listed as a market maker for the new DBS Digital Exchange. Taking a step back, the trepidation of a few years ago has been replaced by strong demand for cryptocurrencies from small and medium-sized banks and wealth managers, particularly in places like Switzerland and Singapore, Grant said.
The Custodigit gateway is an answer to this, he added, and also a way to bring theinvestment of SDX in Omniex, which allows asset managers to access crypto exchanges
CBDC impact
Another thing Switzerland and Singapore have in common is an avid exploration of CBDCs. SIX's recent CBDC proof-of-concept, dubbed Project Helvetia, has shown that there is still work to be done.
The project explored the technological and legal feasibility of issuing a wholesale CBDC on a distributed ledger (Corda di R3) and linking the digital assets platform to the existing payment system.
While COVID-19 accelerates the retail CBDC process, Grant said wholesale CBDCs are "more manageable," adding that retail digital currencies pose many social challenges, not least user privacy.
Looking ahead, the hope was that SDX's go-live date was in the second quarter of 2021, but Grant said the target is currently for late 2021, early 2022, depending on a series. of regulatory factors and requirements. In the meantime, the exchange will continue to collaborate and engage in multiple cross-border initiatives. "
