Breakthrough for decentralized trading of digital securities:
No license required from regulators
Zug, Switzerland — 31st of May 2021.
Success for Swiss blockchain company Token Factory: it launched STX.SWISS in 2019, the world’s first decentralized trading venue for digital assets (security tokens). Now the company has achieved a breakthrough: The decentralized exchange for trading digital assets does not require a license from the regulatory authorities.
“In April 2019, we launched the STX.SWISS platform as a ‘proof of concept’. Since then, we have been working hard to convince various financial market regulators around the world that there is no need for subordination or licensing in any way for completely decentralized trading venues for digital securities. Fortunately and not entirely unexpectedly, we have now received the first positive assessment in Switzerland,” explains Bastiaan Don, CEO of Token Factory. With this, the platform comes out of the proof of concept phase and goes live: the first investment token projects will be announced in the near future. Bastiaan Don: “We have already listed the first three tokens DAI, Maker and XCHF and will be launching the first security tokens on the platform in the near future. Initially, these are security tokens that represent the equity of various SMEs.”
Democratization of the financial markets
Blockchain was created to democratize markets. It is now being applied to build a digital stock exchange. Bastiaan Don: “It makes no sense to try to adapt the existing business models of banks or exchanges to the new technology. Blockchain is designed to minimize or even eliminate the existing dominance of intermediaries, among others. With STX.SWISS, we are thus sending a clear signal of deregulation.”
Users of the platform only need to connect their wallet to the platform and then they can trade completely decentralized and directly among themselves (peer-to-peer). Due to the completely decentralized infrastructure, users of STX.SWISS can trade the corresponding security tokens directly and without the interference of a central counterparty. There is no order book and matching will follow uniform rules according to programmed smart contracts.
The STX.SWISS platform specializes in security tokens. However, payment tokens and utility tokens are also supported. Security tokens represent assets such as shares in real assets, companies, earnings or the right to dividends and interest payments. The token is thus to be valued in terms of its economic function like a share, bond or derivative financial instrument.
Users are not charged any fees for using the platform. STX.SWISS also does not charge any fees for the listing of digital assets (security tokens). Bastiaan Don: “We are sending a clear signal with STX.SWISS. People can trade with each other without trading, onboarding or any other hidden fees.”
Ethereum Blockchain and Uniswap Protocol
STX stands for Security Token Exchange. The platform is built on the global public Ethereum Blockchain, which anyone can access and interact with. It uses the Uniswap Exchange Protocol — a fully decentralized protocol for automated liquidity provision on Ethereum. The Uniswap protocol is a standard for automated exchange of tokens on the Ethereum Blockchain. The exchange of tokens takes place via so-called smart contracts, which hold corresponding trading pairs (security token and payment token) as liquidity in a reserve address.
About Token Factory Switzerland AG
Token Factory Switzerland AG (“Token Factory”) is a blockchain-based startup and a preferred asset tokenization provider. The legally compliant tokenization solution enables fractional investing and ownership. All assets are officially and legally represented as security token on the public Ethereum blockchain. The company works with financial institutions and other strategic partners in various countries to enable and expand the cross-border market. Operating out of Switzerland, Token Factory is focused on bringing asset tokenization to the masses, ultimately leading to a global far more efficient asset trading venue. More at https://tokenfactory.global.