Unit of Stuttgart bourse gets OK for blockchain-based trading system in Switzerland

ZURICH (Reuters) - Switzerland's financial market regulator FINMA has granted a Swiss subsidiary of the Stuttgart Stock Exchange a licence to operate a blockchain-based trading system in the country, the unit, BX Digital, said on Tuesday.

The core element of the new BX Digital trading system is direct settlement and transfer of assets via a blockchain based on the Ethereum operating system, without the need for intermediaries such as central securities depositories.

This saves time and money and enables trading of tokenised assets such as shares, bonds and funds between market participants such as banks and securities firms, it said.

"BX Digital aims to become the leading Swiss financial market infrastructure for trading and decentralised settlement of digital assets," said BX Digital CEO Lidia Kurt.

A direct link to the Swiss National Bank's payment system enables integration with existing banking systems.

Kurt said the new platform would begin operating in the next six months.

The Stuttgart exchange extolled the advantages of blockchain technology for the European capital market.

"As pioneers, we want to shape the digital European market infrastructure for tokenised assets and thus lay the foundation for the completion of the capital market union," said Matthias Voelkel, CEO of Boerse Stuttgart Group.

"BX Digital is the first step, and our digital European issuance and settlement platform will follow soon."

(Reporting by Oliver Hirt. Editing by Mark Potter)