The European Digital Assets Exchange has completed the compliance process to provide a secondary market in Switzerland for security tokens for institutional and retail investors and plans to open in the third quarter of 2022.
Switzerland’s new security token exchange
After almost two years of red tape, the approval of the first security exchange for digital assets in Switzerland, by Zug-based EDSX, should finally be in the final stages.
EDSX is expected to become one of the first platforms in Europe and in the world with a primary and secondary market dedicated to security tokens and hybrids. It is a decentralized exchange with the possibility to create liquidity pools and market making for the secondary market.
Mauro Andriotto, CEO of EDSX, said:
“In the last few months, we have seen an increased interest from traditional financial players for asset tokenization. We have built EDSX because we believe that the blockchain technology will have a disruptive impact on the capital market infrastructures and we want to be part of this change”.
Back in November, Six, the Swiss stock exchange, had actually launched its digital branch, called Sdx, to run a blockchain-based stock exchange and securities depository.
The company had hinted that it expected to soon be able to offer stocks and bonds in the form of digital tokens.
Developments at EDSX
EDSX has succeeded in doing just that, as it is already providing a primary marketplace and will soon open a secondary one in a few months’ time. The decentralized exchange will allow for peer-to-peer trading but without the counterparty risk thanks to blockchain technology.
The website of the company, which aims to be an alternative fundraising channel for SMEs, states:
“We aim to empower businesses and investors through the blockchain and digital assets. Offer to retail investors new asset classes, new opportunities to diversify risks and returns aligned with the risk profile, avoiding expensive financial intermediary fees”.
This is a market that has been growing steadily, especially in Europe over the past three years.
According to a study conducted by the Frankfurt School of Finance and Management, the European security token market is expected to grow by around 81% annually over the next five years and is expected to reach EUR 918 billion by 2026.
The market volume could overtake the cryptocurrency sector in the next five years.
Switzerland has always been a great promoter of the crypto world in general. Among the most recent initiatives we find that since a few months it has been possible to pay taxes with Bitcoin and Ethereum.
This is also why the European Union in 2020 proposed a project to reform the sector, which recently led to the approval of the MiCA, but which still does not fully deal with security tokens, which should be regulated by 2023.