SIX, the owner and operator of Switzerland’s stock exchange, has taken a minority stake and board seat in blockchain startup PassOn AG, as part of its plan to build out a digital asset ecosystem, per a press release.
Swiss-based PassOn is developing an infrastructure that will enable people to transfer digital assets as part of inheritances or according to prearranged set of rules. The startup is currently in the process of launching an initial coin offering (ICO) to fund the development of its platform.
Investing in PassOn brings SIX a step closer to developing a digital asset ecosystem. Earlier in the year, SIX announced plans to develop a fully regulated end-to-end exchange platform for digital assets, dubbed the SIX Digital Exchange. As well as offering trading services, SIX Digital Exchange will provide post-transaction services, including settlement and asset custody services, and is expected to launch in the first half of 2019.
SIX has envisioned its exchange for more than crypto trading, and anticipates the trading of other securities and nonbankable assets to be represented on a blockchain. Given PassOn is developing a platform that will allow for legitimate asset transfers based on predetermined rules, the investment should coincide nicely with SIX’s broader ambitions for Digital Exchange.
This also follows SIX’s decision to begin using Blockstream’s Liquid sidechain, a platform that allows users to tokenize assets, which is more evidence the company expects conventional trading will eventually move to blockchain.
SIX’s efforts indicate institutional interest in digital assets remains strong.The total market capitalization of cryptos is now at about $212 billion — a 75% decline from the $831 billion registered in January, per Coinmarketcap. However, firms within the crypto industry continue to roll out services to meet institutional demand — Coinbase, for instance, has launched custody services for high-net-worth investors worried about safe storage of their assets, while competitor Gemini has secured insurance for assets traded on its platform.
These developments indicate that appetite for the nascent asset class remains significant from institutional investors, despite price volatility in the market. For SIX, being an early mover could help it become a global leader for digital asset trading, and it's likely to benefit from strong regulatory support in the country, making the success of this project more likely.