The crypto industry received another positive boost this week thanks to the Swiss Stock Exchange. As announced by its parent company, the SIX Group, the exchange’s new digital platform will feature a range of services for the crypto market. Set to launch in mid-2019, the platform will not only offer ICO consulting but it may also include tradeable assets. Although the exact details haven’t been discussed, SIX Group spokesman Stephan Meier told Swissinfo that the aim was to create a “fully regulated” ecosystem for cryptocurrencies and its associated technology.
“With the new service we will provide a safe environment for issuing and trading digital assets and enable the tokenization of existing securities and non-bankable assets to make previously untradeable assets tradeable,” Meier said in the July 15 interview.
Strict Regulations Will Legitimize Cryptocurrencies
Expanding on the details, the representative noted that all digital assets would have to go through the same due diligence as traditional assets. Beyond that, he posited that regulation may make it possible for the conversion of cryptocurrencies to fiats in the future.
“It is also still open whether cryptocurrencies can be traded and how a conversion into fiat would be facilitated,” Meier continued.
The announcement is the latest form of validation by those in the financial world. Back in April of this year, JP Morgan said that it was ready to endorse the likes of Ethereum, Bitcoin and Ripple. In tandem with the investment firm’s positive move toward digital currencies, Coinbase has recently received regulatory approval from the U.S. Securities and Exchange Commission (SEC). Following a lengthy application process, the crypto exchange has been given the green light to offer tradeable security tokens that will be overseen by federal forces just like any other listed asset.
For Coinbase, SEC approval was made possible after it purchased Digital Wealth LLC, Venovate Marketplace Inc. and Keystone Capital Corp. By acquiring three companies already listed with SEC, the crypto business was given a favorable hearing by the exchange authority and the Financial Industry Regulatory Authority (FINFRA). Whether it would have been the same outcome without these acquisitions is unclear. However, at least in Switzerland, the pending innovation by the SIX Group should mean crypto companies don’t have to partner with established financial firms to gain regulatory approval.
Swiss Exchange Could Tame the Wild West
From a general perspective, the Swiss Stock Exchange’s new platform will make it easier for individuals to trade cryptos and businesses to host ICOs. Moreover, it will bring additional legitimacy to the industry. Regulated assets are more desirable than those that operate in a space that, for all intents and purposes, could be described as the Wild West right now. Indeed, with exchanges falling victim to cyberattacks and cryptojackers impersonating celebrity Twitter accounts, the industry surrounding cryptocurrencies isn’t always portrayed in a positive light. For investors, operational standards matter. Even though blockchains are proving to be useful innovations, none of that matters to those holding the purse strings if things aren’t regulated.
If all goes to plan, the SIX Group’s new platform will go some way to addressing these issues. However, perhaps the most interesting point raised by Meier was the potential crypto to fiat conversions option. According to a recent report published by Imperial College and eToro, there are six steps cryptocurrencies need to make if they’re going to become a standard payment option. Regulation is one, but so too is usability. Under the current system, we’re used to swapping one currency for another without it not being an issue. When it comes to cryptos, the process isn’t as easy. However, if the new digital platform can facilitate fiat to crypto and crypto to fiat transactions, the utility of cryptocurrencies will increase.
The Future is Regulated
For many, it’s still unclear whether the likes of Ethereum and Bitcoin will replace traditional currencies. However, if they’re going to, there will likely be an interim period where both systems are used. If that’s the case, a platform where you can easily switch between assets would be highly desirable. In the short term, investors will only be interested in how the announcement has affected the price of Ethereum and the like. However, in the long term, the survival of cryptocurrencies will be predicated on its ability to mesh with the current standards of operation.
While the goal of any disruptive tech is to shake up the system, it ultimately has to integrate with it at some point if it wants to thrive. For cryptocurrencies, this means accepting financial regulations in order to gain access to established trading platforms. By doing this, the leading coins will not only become more popular but have a solid foundation from which to become an integral part of the business world. When this happens, the rest will follow and that’s when the technology will really make its mark on the world.