SIX Swiss Exchange is rolling out a platform that enables traditional and digital assets to be posted as collateral.
The Digital Collateral Service (DCS) offers firms managing bonds and selected crypto assets to post both as collateral to cover a single exposure.
David Newns, head of SIX Digital Exchange (SDX), said the role of cryptocurrencies in collateral management was likely to become increasingly important.
“Our new and fully integrated solution empowers product issuers, traders, brokers, and market makers to optimise their collateral usage, whether it’s crypto or traditional securities, with built-in risk management safeguards,” said Newns.
“This allows financial institutions to embrace crypto collateral on a larger scale.”
Through the new platform, Six intends to significantly streamline operations for traders and their counterparts, enhance portfolio management efficiency and minimise counterparty risk.
The company noted that beyond creating a more holistic collateral management platform, DCS employs the crypto custody infrastructure of SDX, providing users with increased safeguarding mechanisms.
Moreover, the default protection for collateral that is held in this type of account adds a layer of security, which grants the justification many institutional investors have been seeking to increase their participation in cryptocurrency trading, it said.
“Building on our role as a trusted financial market infrastructure and leveraging the flexibility of our state-of-the-art Triparty Agent, we are thrilled to expand our offerings to include cryptocurrencies as a new asset class for collateralisation,” added Christian Geiger, head of clients and products securities finance at SIX.
“With the growing institutional appetite for digital assets, we are committed to meeting the needs of this highly risk-conscious investor segment.”
