Swiss stock exchange operator SIX has launched a groundbreaking Digital Collateral Service that enables financial institutions to use cryptocurrencies as collateral alongside traditional assets. This innovative service marks a major advancement in institutional crypto adoption.
The new offering integrates SIX's triparty agent services, which provide outsourced collateral management, with crypto custody solutions from SIX Digital Exchange (SDX). This allows institutions to manage both conventional and crypto collateral through a single unified platform.
Initially, the service supports seven major cryptocurrencies including Bitcoin, Ethereum, Avalanche, Cardano, Solana, Ripple, and USDC stablecoin. Additional crypto assets will be added based on client demand.
David Newns, Head of SDX, emphasized the growing role of cryptocurrencies in collateral management. He noted that the integrated solution enables financial firms to optimize collateral usage across both crypto and traditional securities while maintaining risk management safeguards.
The service primarily targets crypto-related transactions involving ETP issuers, institutional traders, and crypto exchanges. While institutions can combine bonds and bitcoin as collateral for individual positions, crypto assets cannot yet be used as collateral on SIX exchanges or for repo transactions.
The main purpose is to provide a conventional collateral solution for over-the-counter and bilateral crypto trades. The platform received regulatory approval after a three-month review process.
This development streamlines operations for financial institutions by eliminating the need for separate platforms to manage crypto collateral. It also enhances protection during default scenarios, bringing institutional-grade security to crypto collateral management.