BX Digital, a subsidiary of Boerse Stuttgart, has received conditional approval for a distributed ledger technology (DLT) trading facility as the Swiss company looks to become a market infrastructure for decentralised trading and settlement of digital assets.

A DLT facility refers to a legal entity that enables multilateral trading of DLT securities, which includes digital assets that represent ownership or rights, such as security tokens, payment tokens, and usage tokens.

BX Digital’s new DLT trading system, which has been approved by the Swiss Financial Market Supervisory Authority (FINMA), uses a Swiss franc settlement system and guarantees the transfer of assets on a public blockchain, without the need for intermediaries such as central securities depositories (CSDs).

It enables the trading of tokenised assets such as shares, bonds and funds between market participants such as banks and securities firms.

The facility is linked to the Swiss National Bank's payment system to ensure integration with existing banking systems and increase security.

“By integrating a public blockchain into the existing financial system, BX Digital is making a significant contribution to the efficiency of the capital market and the breakthrough of digital assets,” said Andreas Ruflin, chief digital officer, BX Digital.

The authorisation is subject to the fulfilment of certain conditions, with BX Digital saying it will not start operating and accepting customers until these conditions are met.

Lucas Bruggeman, chief executive of BX Swiss Exchange and chairman of the board of directors of BX Digital, added: “We have already been able to attract an ecosystem of partners and got banks and issuers excited about our new financial market infrastructure.”

Dr. Matthias Voelkel, chief executive officer of Boerse Stuttgart Group, added the group is also planning to launch a digital European issuance and settlement platform.

---