FINMA Grants First DLT Trading Facility License to BX Digital AG

Switzerland's Financial Market Supervisory Authority (FINMA) has issued its first license for a distributed ledger technology (DLT) trading facility to BX Digital AG, a subsidiary of BX Swiss AG and part of the Boerse Stuttgart Group. This move signifies a step forward in integrating blockchain technology into the Swiss financial market.

According to FINMA's statement, the license permits BX Digital AG to operate a platform for the multilateral trading of DLT securities. The regulator emphasized the importance of "a strategy to ensure business continuity (BCM), including with regard to the settlement infrastructure based on a public blockchain." Additionally, FINMA required "technical checks of the technology used, such as checking the source code used by smart contracts" to mitigate operational risks.

The platform is designed for institutional participants, primarily banks, and will utilize the Ethereum public blockchain for settlement. BX Digital AG applied for a small-scale DLT trading facility license, adhering to specific thresholds outlined in the Ordinance to the Financial Market Supervision Act (FinMIO). The platform will connect to the Swiss Interbank Clearing (SIC) system, operated on behalf of the Swiss National Bank, to facilitate delivery-versus-payment (DvP) transactions. The approval is based on Switzerland’s DLT Act, which came into effect on August 1, 2021, and aims to balance technological innovation with financial stability.