Crypto News: July 6, 2018

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The Swiss stock exchange is building a regulated exchange for tokenized securities.

The plan is to offer a full service product that includes trading, settlement and custody for the digital assets. Additionally, the platform (SIX Digital Exchange) will adhere to the same regulatory standards as the non-digital exchanges and be overseen by Swiss financial regulators.

This announcement confirms a few things:

  1. Most assets (stocks, bonds, real estate, etc) will be tokenized and supported on regulated trading platforms.

  2. The incumbents have a head start due to their size, regulatory licensing, and built-in user base (current assets trading). They are likely to leverage this advantage to defend their position of power.

  3. Most investors will never know they are using distributed ledger technology, let alone trading tokenized assets. They will simply buy and sell assets as they always have.

The current plan is for the exchange to be ready for use in mid-2019. At that time, tokenized bankable assets will be available for trading, with further plans to develop support for tokenized non-bankable assets.

The fact that the announcement explicitly calls out the difference between bankable and non-bankable assets is interesting. This increases the odds that we will see a regulated exchange that allows someone to trade equity, debt, real estate and digital assets (cryptocurrencies) on the same platform.

I would anticipate many stock exchanges to quickly follow suit here, along with announcements of their own tokenized asset exchanges from Circle and Coinbase. This showdown between the traditional finance incumbents and crypto incumbents will be worth watching. One is incentivized to preserve the status quo, while the other is looking to create a new, more global financial system.

As I’ve always said, we’re going to Tokenize the World and no one can stop us :)

THE RUNDOWN:

IBM closes $740 million deal to supply data security to Australia: IBM has landed a $740 million) agreement to become a central technology partner of the Australian government over the next five years. The contract will see services such as automation and blockchain provided to federal departments including defense and home affairs. Read more.

The EU's biggest ETF firm expands into crypto products: Europe’s largest trader of exchange-traded funds is moving into crypto, even though its regulator urges consumers and institutions not to buy and sell digital currencies. Flow Traders NV, an Amsterdam-based speed trader, is making markets in the first exchange-traded notes based on Bitcoin and Ether. Read more.

Bittrex and Invest.com partner on new crypto trading platform: Bittrex, a U.S.-based cryptocurrency exchange platform, and invest.com, a fintech startup based in London, are set to launch a new EU-focused crypto trading platform. The collaboration aims to provide cryptocurrency investors with "the ultimate platform to trade cryptocurrency in a safe and secure environment.” Read more.

Bitcoin and other cryptocurrencies are soaring again: Values seem to be steadily recovering after a rather dismal period in the last week of June. Bitcoin, the predominant virtual currency, is now up more than 13% on the $5,900 price it commanded last Friday, before things started to look up again. Read more.

Ex-Jefferies Asia CEO joins crypto firm Block.one: Jefferies Group’s former top banker in Asia is joining Block.one, the firm behind a recent $4 billion cryptocurrency offering. Michael Alexander, who until recently was Asia chief executive officer at Jefferies, will head Block.one’s venture capital arm, with a focus on developing projects that rely on the firm’s EOSIO blockchain software. Read more.

Venezuela to fund housing for homeless with national cryptocurrency Petro: The Venezuelan Minister of Habitat and Housing Ildemaro Villarroel has announced that the country’s government is planning to fund the construction of houses for the homeless with the national cryptocurrency Petro. Read more.