SIX and SBI Planning Digital-Asset Exchange Based in Singapore

SIX Digital Exchange and SBI Digital Asset Holdings Co. plan to create an exchange for digital assets that’s based in Singapore and will start operation by 2022.

The plan, which is subject to regulatory approval from the Monetary Authority of Singapore, sees formalized Singapore operations next year, with the goal of launching active offerings by 2022 at the latest, according to a statement. Connectivity to Swiss and Japanese businesses as well as other partnerships are expected to follow. The joint venture’s issuance, exchange and CSD platforms are expected to be fully regulated by existing Singapore law.

“Our reach as soon as go live will be across the whole of Southeast Asia and we expect to have market participants from across the region as soon as we launch,” said Tim Grant, head of SDX. “The real play is global liquidity. That’s what the institutional market wants. It doesn’t want to trade 9 a.m. to 4 p.m. in its own market then go to the next and the next.”

This is all happening at a time when the world of crypto and digital currencies is coming of age. Bitcoin just surpassed its December 2017 record high. Companies like MicroStrategy Inc. and Square Inc. are embracing crypto, and it’s winning fans like Paul Tudor Jones and Stan Druckenmiller.

However the space is still volatile. That late-2017 peak saw a spate of expansion plans that never came to fruition. And there are still struggles with regard to legal and regulatory issues. The founders of crypto trading giant BitMEX resigned their roles with the operation after being charged by U.S. authorities by skirting laws preventing money laundering, as one example. Decentralized finance or DeFi, a recent boom, has had its share of controversies as well.

SDX and SBI are outlining some big plans for the new operation, however. “We’re trying to disrupt ourselves,” Fernando Vazquez Cao, chief executive of SBI Digital Asset Holdings, said in an interview.

The exchange plans to offer equity -- both listed shares and private placements -- as well as debt instruments, fund structures and structured products, Grant said. The venture will be looking at crypto assets and even “nonbankable” assets like real estate and art, he said.

Separately, a venture was announced Monday in which SIX Digital Exchange, Swisscom and Sygnum Bank will enable Swiss banks to offer access to digital assets for their customers through an institutional digital asset gateway. An initial joint service, based on the already available Custodigit platform is planned to start in the first quarter of next year with plans to add “significant capabilities” throughout the year, according to a release.

©2020 Bloomberg L.P.

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