Frequently asked questions
Obtaining the first Swiss DLT (Distributed Ledger Technology) trading system facility licence marks a significant milestone for BX Digital and the Swiss financial market. This licence enables, for the first time, the trading of digital assets such as tokenized shares, bonds and certificates on a regulated secondary market.
Transactions are settled within minutes on a public blockchain, eliminating the need for centralized financial intermediaries such as central securities depositories or clearing houses.
This achievement highlights BX Digital’s compliance with strict regulatory standards, fostering trust and legal certainty for investors in the trading of digital assets.
A stock exchange licence typically applies to the trading of traditional securities that are centrally held and settled.
By contrast, a DLT trading system facility licence goes significantly further: it enables the trading of digital assets stored in a global database (blockchain). These digital assets can include programmable features, such as voting rights at general meetings. All rights and functions are transferred via the blockchain in just a few minutes. By comparison, settlement in the traditional system, which involves multiple financial intermediaries, generally takes two days or more.
The key difference lies in the efficiency and speed of settlement and the elimination of intermediaries in the DLT system.
A regulated marketplace provides a high level of transparency and security, which is crucial for investor protection and represents a key step in advancing the blockchain ecosystem. It operates within a clear legal framework. Regulation helps to prevent fraud and market manipulation, thereby fostering long-term trust in the trading of digital assets.
As a financial intermediary, BX Digital complies with the provisions of the Swiss Anti-Money Laundering Act (AMLA) and verifies trading participants and their transactions in accordance with these regulations.
Blockchain technology enables the traceability of historical transactions, making it possible to detect illegal activities. Compliance with money laundering regulations at the end-client level is ensured by the trading participants where the assets are held. Only investment firms and other regulated participants domiciled in a country with adequate AMLA provisions are admitted to BX Digital. Furthermore, BX Digital monitors the wallets of trading participants using blockchain analysis tools.
On the issuer side, BX Digital targets companies in the real economy, such as growth companies, as well as financial product providers and asset managers. These entities can offer their tokenized assets for trading via BX Digital. On the trading participant side, BX Digital focuses on banks and investment firms that want to provide their clients with access to digital assets and develop additional products and services based on this offering. Indirectly, BX Digital aims to reach both private and institutional investors.
BX Digital leverages an innovative combination of public blockchain technology and a regulated, user-friendly environment. Digital assets can be traded directly on the public blockchain, eliminating the need for national central securities depositories or clearing houses. This simplifies trading, making it faster and more cost-effective.
Another key advantage is that banks and investment firms can continue using their existing processes and systems without requiring additional pre-funding or the use of stablecoins. The risk of counterparty default is eliminated. Investors also benefit from seamless access through familiar banking and brokerage applications, without the need to navigate complex new technologies.
With these innovations, BX Digital provides a modern solution that harnesses the benefits of blockchain technology without the complexity and risks often associated with emerging technologies.
A decentralized exchange (DEX) is a trading platform that exists only on the internet and operates using smart contracts. Unlike a centralized organization, a DEX is governed by holders of governance tokens and is typically not subject to national regulation. Users provide liquidity themselves, meaning they must pre-fund and bear counterparty risk as they trade directly with other users.
By contrast, a centralized exchange (CEX) is operated by a central organization and is regulated by national supervisory authorities. This regulation makes it easier for financial institutions, such as banks or investment firms, to participate and provide liquidity, as the platform offers additional safeguards and operates within a legal framework.
BX Digital is a fully regulated centralized exchange (CEX) that leverages public blockchain technology. It combines the strengths of both models: the security and regulatory oversight of a CEX with the flexibility and efficiency of a decentralized blockchain infrastructure. Users benefit from the transparency and security of blockchain technology, while also enjoying the advantages of a central point of contact and protection under regulatory requirements.
Investors place their trade orders through their bank or broker, which submits them to the BX Digital order book. Once a trade is executed, the digital asset is transferred from the seller’s wallet to a settlement smart contract. This smart contract triggers the payment between the trading parties, which is conducted in Swiss francs and routed through the Swiss Interbank Clearing System (SIC). BX Digital’s integration with SIC facilitates this process. After the payment is confirmed in SIC, the digital asset is transferred to the buyer’s wallet. The entire process is typically completed within 30 minutes – a revolutionary improvement compared to the traditional financial system, where this process usually takes two days.
BX Digital is the sister company of the Swiss exchange BX Swiss and a part of the Boerse Stuttgart Group, the sixth-largest exchange group in Europe. Through its digital division, Boerse Stuttgart Digital, the Group is recognized as a European pioneer in the custody, trading and distribution of digital assets.
This unique synergy combines decades of experience in the regulated capital market, extensive technological expertise and a strong capacity for innovation. It also provides access to an extensive network of trading participants and issuers, both within Switzerland and internationally.
Digital assets are subject to value fluctuations, just like traditional assets. BX Digital does not provide financial or investment advice. Since this is a new market, it remains uncertain how quickly digital assets will gain traction and become established.
The security and protection of assets are primarily ensured by the trading participants in the marketplace, where the assets are held (banks and securities firms supervised by FINMA). BX Digital does not provide custody services but focuses on trading and settlement, i.e. the transfer of assets. Settlement operates on a delivery versus payment (DvP) basis. This ensures that payment is made only after the financial instruments associated with the transaction have been blocked by the BX Digital settlement system. At no point during the settlement process does BX Digital acquire ownership of the transferred financial instruments. Through its settlement mechanism, BX Digital eliminates counterparty risk for participants.
BX Digital offers trading in a wide range of digital assets, including tokenized equities, bonds, exchange-traded products (ETPs) and tracker certificates. The platform is continually expanding its offering to incorporate new and innovative assets enabled by tokenisation. In this process, we are guided by market demand and regulatory requirements.
Digital assets are values directly mapped onto a distributed ledger technology (DLT) such as blockchain. For the first time, this technology makes it possible to digitally map, uniquely assign and transfer values without the need for a central intermediary.
Unlike traditional assets, digital assets are programmable and can include additional functionalities. These range from exercising voting rights in governance processes to automated dividend payments and complex automations through smart contracts.
A key advantage of digital assets is their flexibility: they are divisible, can be transferred almost instantly across the globe, and are available for transactions 24/7 – all without relying on traditional financial intermediaries. With blockchain technology, these transactions are also transparent, secure and can occur directly between the involved parties (peer-to-peer).
The programmability of digital assets allows them to be tailored to specific needs. Similarly to how software defines the functionality of devices like phones or cars, the programmability of digital assets is transforming the financial sector. Stocks, bonds and other assets can be managed far more efficiently and automatically.
Another significant benefit is decentralization. Digital assets enable issuance, trading, transfer and custody without central counterparties, granting direct access to capital markets. This is particularly valuable in areas such as decentralized finance (DeFi) or the tokenisation of assets like real estate or artworks.
Many experts believe digital assets will shape the future of financial markets, as they are not only more efficient but also more inclusive and interactive. They unlock new opportunities for investment, capital access and the democratization of financial services.
BX Digital will operate within the framework of the Financial Market Infrastructure Act (FMIA) and under the supervision of FINMA. FINMA ensures that BX Digital meets all the requirements of a DLT trading system. The operational processes, risk management and data security of BX Digital must comply with applicable Swiss standards. BX Digital will undergo annual audits conducted by both an external and an internal audit firm.
BX Digital focuses on the trading and settlement of digital assets. A key component of this is the creation of secondary market liquidity via its proprietary network of market makers and trading participants, enabling assets already placed with investors in the primary market to be traded on the secondary market.
BX Digital does not offer tokenisation and capital raising services, as BX Digital believes that these should be provided by the issuer or service providers specialising in digital assets and are interoperable with BX Digital’s trading and settlement infrastructure due to the shared public blockchain.
BX Digital’s settlement infrastructure is multi-chain capable, meaning it supports multiple public blockchains. Ethereum will be used for the launch. Additional blockchain types can be integrated as needed, provided they are suitable for issuing legally compliant tokenized assets.
Digital assets traded on BX Digital must be structured as registered securities in accordance with OR 973d or an equivalent regulation. They must also meet certain functional standards, such as those defined by the Capital Markets Technology Association (CMTA).
The CMTA standard was developed by a broad ecosystem of tokenizers and banks to support the creation of a large and interoperable market. Further details on the requirements for issuers and the process for applying for admission to trading can be found in the Admission Rules.
Trading participants or market makers can be investment firms or other entities supervised by FINMA or a foreign authority. The connection requires a FIX line for transmitting orders or quotes, as well as the integration of the firm’s wallet infrastructure with Ethereum.
Further details can be found in the Admission Rules.
Tokenized securities and other assets from domestic and foreign issuers can be traded on BX Digital, provided they qualify as DLT securities. These are registered securities in accordance with Article 973d of the Swiss Code of Obligations (CO) or other securities held in decentralized electronic registers (distributed ledgers). These rights allow the creditor to manage their assets in a technically secure manner, while the debtor has no direct access.
The BX Digital Admission Board is responsible for deciding on the admission of issuers and DLT securities and for monitoring issuers’ compliance with their obligations. Admission is granted upon application by a qualified person. Further details can be found in the Admission Rules.