SIX Digital Exchange trading platform, which planned to be using blockchain technology to run the SDX, has delayed a planned launch from this to next year.
This is due to legal and regulatory issues
taking longer than expected, with SIX discussing with bank partners the services which would be offered on SDX.
SIX head Jos Dijsselhof told Reuters that SIX was working with Credit Suisse, JPMorgan Chase & Co. and Citi.
SDX plans to run parallel to the existing SIX trading platform, which currently involves three steps to complete a trade in a process that could take up to several days. In a blockchain distributed ledger, two of these steps should be removed, allowing a transaction to be completed within fractions of a second.
The use of blockchain to speed up and eliminate traditional delays and intermediaries in clearing and settlement is a fundamental change to how securities are handled on exchanges. Regulators are understandably nervous and want to ensure that existing systems which have stood the test of time are being replaced by even more robust systems which won't have opportunities for exploitation or theft. As always in financial services, protecting other people's money is key.
This "slow but steady" is sensible given the importance of exchanges and the safeguards required, and should help ensure the support of key banks is in place for launch, which can only assist in mainstream access and use of this digital exchange.