Transforming the markets with the SIX Digital Exchange SDX


We are making a big investment in SDX because we think we can transform the markets and make them more efficient,” says Jos Dijsselhof, the CEO of SIX Group in Zurich. He believes that exchanges will continue to play an important role in the economy in the future.


Jos Dijsselhof, we are sitting right next door to the SIX Digital Exchange SDX, now in its second year of operation. What’s the reasoning behind this digital exchange?

Back when we started this initiative, we thought long and hard about the future of capital markets and stock exchanges and what technology means for the future. We decided that there is an opportunity to reform the capital markets by using technology: in this case, distributed ledger technology and tokenization. And that's when we started the SDX project to build a completely new exchange in parallel to the existing one that would offer products tokenized on distributed ledger technology, which would help us to transform the capital markets.


Where does SDX currently stand, in the spring of 2023?

SDX has progressed really well. We have three different streams: to tokenize and offer products that are currently already available on traditional exchanges – equity and fixed income. The second stream is to look at the new products and services that we can provide and products that we can make tradable on an exchange, like carbon or art or whatever tokenization that is of interest to investors. And then thirdly, we look at Web3, where we develop crypto services to make sure that the crypto business becomes more regulated and secure than it is today. On all these three fronts we’ve made really good progress.


Did you have even higher expectations when you launched SDX?

I think the long-term expectations and aspirations are exactly the same as they were at the beginning. We probably had higher expectations in terms of speed of adoption. We thought that things would transfer relatively quickly, and it has taken a bit more time. But of course, this is a system where you need to get a lot of stakeholders aligned. You need people to connect, you need people to issue products, you need people to start trading and create liquidity. We have built SDX in the time frame that we set out, but the market adoption is going a little bit slower than we thought. But the long-term aspiration and the way SDX can really transform the exchange business is still very much alive.


SDX is the world’s leading exchange for digital assets. How do you explain Switzerland’s leading position in this field?

First of all, the company SIX is in Switzerland, and we’re very proud that we’ve always been driving innovation. This is also the place where the first stock exchange moved from open outcry trading to an electronic exchange. We want to be on the forefront, so we’re pushing it. But of course, the key stakeholders in Switzerland – the regulator, the national bank – everybody is also focusing on making sure that the country is fit for the future – not only regulating and having laws and regulations for today, but also for the future. And last but not least, there are great talents here in Switzerland. Switzerland is recognized across the world as one of the most innovative countries. If you look at all the rankings and lists, then usually Switzerland is high – if not number one, it’s number two or number three. So in terms of people and innovation power within the country, Switzerland is very strong.


Let’s talk about another initiative with a focus on the future, the F10 Tech Incubation Program. It’s been very much a reality since 2016. Could you briefly talk us through how this incubator works?

First of all, let me start with the name: F10 was the old name. It has just been rebranded to Tenity, which is the new name to take it into the future. But the function is still the same: to find people who have really good ideas about new businesses or transforming existing businesses. Usually it’s one or two people with an idea, and they can join our incubator and accelerator program. We then help them to move that idea to a product, from a product to a market, and in the end to a business and really building a company. So starting from a very smart and good idea, but very small, helping those companies to grow – that’s the purpose of our incubation and acceleration program. 


Is going public also one of the final purposes?

We hope that there are many of these companies that are very successful, that they become unicorns and list on our exchange. We have an SME segment for smaller companies. But of course, we also would like some of those technology companies to be listed on our main exchange. 


You are not only focusing on Switzerland. You are about to launch an initiative in Singapore: AsiaNext, a digital exchange for Asia. Why?

Having the digital exchange in Switzerland is really important. As we just discussed, there is a lot of innovation power to be really on the forefront of what is possible. But we also saw that in Asia, the adoption of digital assets and crypto is going much quicker. So we decided to build a digital exchange there in parallel, together with a Japanese partner, in a company called AsiaNext. And there we will be launching some products relatively soon. We are still waiting for one or two approvals from the regulator, and then we can also offer services there. And at some point, we then want to connect Switzerland and Asia and create an opportunity for a bigger liquidity pool in the end.


That’s a view of the future already. Looking into an even farther future, into the crystal ball: Where do you see the future of the business of exchanges in five to ten years?

I think exchanges are really important for the development and growth of the economy. It’s the platform where companies can raise initial capital but also increase capital later, to grow their business and to invest in projects. And I think that role will always be there, which doesn't mean it will always stay the same as it is today. We are making a big investment in SDX because we think we can transform the markets and make the markets more efficient. We can go from T+2 (trade date plus two days) to instant settlement and so on. So we will continue to evolve the market, but the marketplace and exchange will always be needed. But we will be using innovations and new technologies and new products and services to serve the market as well as possible.


Jos Dijsselhof, thank you very much for sharing your thoughts with us.

Thank you very much. It was a pleasure.