SIX’s head of exchanges Thomas Zeeb on digital asset and crypto plans

Thomas
Zeeb, head of securities and exchanges at SIX
Group

www.six

• The owner of the Swiss stock exchange is building a
  digital asset trading platform.
• Thomas Zeeb, head of securities and exchanges at the
  company, talked to Business Insider about the project.
• The platform will mainly cater to ICO tokens — digital
  assets structured like ethereum that represent a stake in a
  project or business.
• Zeeb believes crypto tokens will one day be as
  mainstream as derivatives in finance and thinks they could be
  important in alternative investments, allowing people to
  tokenize things like art collections.

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LONDON — The Swiss stock exchange’s new digital asset platform is
unlikely to offer cryptocurrency trading, according to the head
of the project.

“Cryptocurrencies keep coming up. The capability is there to do
it but to be honest, it’s not a priority. There are plenty of
exchanges currently providing bitcoin trading
services,” Thomas Zeeb, the head of securities and exchanges
at Swiss stock exchange owner SIX Group, told Business Insider in
an interview.

SIX
announced plans in July to launch the Swiss Digital Asset
Exchange, or SDX, which will be one of the first fully
regulated, mainstream exchanges for digital assets.

Zeeb said the new exchange will plug the funding gap between
crowdfunding and IPOs. Usually, companies in this gap turn to
venture capital or private equity. But 2017 saw a surge in

so-called initial coin offerings (ICOs), in which startups
issue their own digital tokens to raise money for a project.

ICO tokens can be freely traded via online exchanges that have
sprung up in recent years. SIX want to provide a regulated and
mainstream home for these assets so that institutional investors
can feel safe investing in them.

“There is demand from institutional clients to find a way to
legitimize and bring asset safety into play,” Zeeb said.

“Our job is to bring capital to companies at the end of the day,”
Zeeb said. “That’s changing.”

Zeeb said there are still “reputational” issues surrounding
bitcoin and said he believes “there’s nothing behind bitcoin
other than a lot of hope and hype.”

“But let’s face it,” he added, “whether you’re in a traditional
or a digital market, there’s always been listings and securities
you can name — US and Canadian penny shares, Australian mining
shares — there have always been listings that are hugely risky,
and in some other ways potentially problematic.”

Tokenized art collections

As well as startups issuing their own tokens, Zeeb envisages
existing securities or ETFs will be tokenized into digital assets
to allow for fractional ownership, for instance. He also predicts
that art galleries and other institutions that hold bundles of
exotic assets may begin to tokenize their collections.

“In future, an art gallery or a museum may not be so dependant on
public funding or their museum shop to get the funding but can
actually tokenize a collection and people can trade and
participate in a value increase based on a yearly or bi-yearly
valuation based on auction results and that kind of stuff,” he
said.

“Why not? It’s a much more intelligent way for these guys to
monetise and maintain an art collection.”

As for investors, Zeeb believes ICO tokens and other assets will
come to be another option in the toolkit of investment managers.

“We’re absolutely convinced [crypto is] where derivatives were in
the early 90s and it’s not mainstream yet. In the early 90s
derivatives were on the fringes, there were a couple of people
who understood them, a lot of people lost money. Gradually, it
got regulated, now every asset manager has derivatives as part of
his toolkit.

“I’m absolutely convinced that digital assets, as well as a
digitalisation of existing assets, is going to come a lot faster
than the 30 years it’s taken derivatives to be everywhere. It
will go in maybe five years.”

‘Digital assets are here to stay’

SIX’s digital asset project comes as other traditional financial
market infrastructure providers look to crypto as a new growth
market. ICE, the owner of the New York Stock Exchange,
recently announced a project aimed at making it easier to spend
bitcoin and
the Stuttgart Stock Exchange is also working on an ICO
platform.

“Everybody’s coming at it from a slightly different angle,” Zeeb
said.

“Are we at the vanguard or are we the guys leaning so far over
the balcony that we’re going to fall off? I don’t believe that’s
the case. I believe digital assets are here to stay.”

Still, Zeeb cautioned: “Let’s wait for the implementations. You
make an announcement, we’ve got an extremely good track record of
delivering on our announcements, but the path is fraught with
perils. The regulatory side is a significant one. That could
affect us all and slow us all down.”

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