Swiss Stock Market to Launch Pro Infrastructure Cryptocurrency Exchange

Cryptocurrency valuations have been on a steady downward trajectory over most of 2018 following the bubble that built towards the end of last year. Despite overall market capitalisation of the cryptocurrency market dropping to almost a third of its early January high of almost $825 billion it would seem that the established finance world is coming around to the conclusion cryptocurrencies are here to stay. Further evidence of that shift in position is today’s news that SIX, the Swiss stock exchange, is building a platform for the trade of cryptocurrencies and other ‘digital assets’.

The investment community is firmly split down the middle into those that have been investing online in cryptocurrencies and those who would consider the very suggestion they do so an affront to their intelligence. The former category can be further broken down into genuine cryptocurrency enthusiasts and evangelists and those who have dabbled as a hedge ‘just in case’.

The latter group could be forgiven for coming to the conclusion that hedge was not going to pay off as prices slid over the past few months. Bitcoin, the original and still largest-by-a-distance cryptocurrency, has seen its exchange value drop to just over $6000 from a high of almost $20,000 in mid-December 2017. Sceptics have been enthusiastically doom mongering Bitcoin value’s ‘return to zero’.

The exact nature of the future for the cryptocurrencies market, and whether the presently dominant coins and tokens will continue to be so into the future, is far from clear. However, the finance world seems to believe that cryptocurrencies, as an asset class, are sticking around. SIX chief executive Jos Dijsselhoff commented on the bourse’s announcement:

“For us it is abundantly clear that much of what is going on in the digital space is here to stay and will define the future of our industry. The financial industry now needs to bridge the gap between traditional financial services and digital communities.”

Switzerland’s financial sector, and regulator, has adopted a pro-active approach to the rise of cryptocurrencies as an asset class. The Alpine country was the first to initiate a move towards exploring a regulatory framework for ICOs, the Blockchain-sector’s equivalent to an IPO. Other major finance hubs have taken a draconian approach, either banning ICOs, or their marketing, altogether or effectively doing so, such as the SEC in the USA.

Institutional investors moving into the market is considered the next major step the cryptocurrency market must make. That would certainly go a long way towards shaking it out of its current funk. A professional trading infrastructure is key to that and appears to be the market SIX is targeting. The exchange being developed will include “integrated post-transaction services such as deal settlement and asset custody”.

The exchange is expected to be in a position to offer the first tranche of services by early next year and the platform is, fittingly, being built on Blockchain technology. Switzerland has obviously adopted a strategy of trying to steal a march on other global financial centres when it comes to cryptocurrencies and positioning itself as an early market leader. That doesn’t of course mean the cryptocurrencies will definitely become an established mainstream asset class but is a positive sign for those who have already invested in them.