The Frankfurt Stock Exchange is preparing a regulated platform for cryptocurrencies

Deutsche Börse, the operator of the Frankfurt Stock Exchange, plans to launch a regulated cryptocurrency market in 2024, ledgerinsights.com reports.

In addition, according to the quoted source, Deutsche Börse plans to implement stablecoins, which is not unusual in the institutional space. For example, to settle digital securities on Switzerland's SIX Digital Exchange, SDX uses tokenized francs backed by central bank deposits.

"The multilateral trading facility envisaged is part of Deutsche Börse's ambition to cover the entire value chain of digital assets," said Thomas Book, who heads the trading and clearing division, recently. The platform will be focused on institutional investors.

The German group is already the majority shareholder of Crypto Finance, the trading and brokerage firm it acquired in 2021 for 100 million francs.

Its smaller competitor, Börse Stuttgart, also has a crypto platform, BSDEX, a joint venture with SBI Japan, Axel Springer and others. However, BSDEX focuses on the retail segment, although it offers institutional custody.

Across the Atlantic, several traditional financial players, including Citadel Securities, Fidelity and Schwab, have formed EDX Markets, an institutional-focused cryptocurrency exchange accessed through broker-dealers, similar to conventional exchanges.

• Deutsche Börse, active in the field of securities, funds and tokenized alternative assets

Beyond crypto, Deutsche Börse is active in tokenized securities, funds and alternative assets, according to the source cited.

Its D7 digital securities ledger is based on DLT (distributed ledger technology), although the platform is currently centralized. So far, 4,000 digital titles worth over 3 billion euros have been issued on the platform. Three-quarters of those have been issued in the past month, since it released an application programming interface (API) that allows for greater automation. Among the partners using the issuing solution are Commerzbank, DekaBank, KFV, LBBW and Vontobel.

To date, D7 has focused on the German fixed income market, but plans to expand into Luxembourg and therefore internationally in the last quarter of 2024. D7 will also explore expanding asset classes beyond those with fixed income to ETFs. Although they plan to have a decentralized custody version, it does not yet have a specific release date.

Stephan Leithner, a member of Deutsche Börse management, highlighted the recent rapid expansion of structured retail products. They are popular in Germany, but also in France and Benelux. In his opinion, the considerable cost savings from the automation of digital issues and instant settlement show how suitable they are for the market.

• Deutsche Börse, active in the digital sector

In August, Deutsche Börse acquired fundsDLT, a Luxembourg-based funds distribution platform, and integrated it with D7. Beyond digital securities, Deutsche Börse has invested in tokenized asset platform 360X alongside Commerzbank. Its target markets are art, music and real estate. One of the drivers of tokenization is the interest shown by asset managers.

It should be noted that one of Deutsche Börse's earliest DLT experiences was with HQLAᵡ, the collateral management platform used by JP Morgan, Goldman Sachs, ING, UBS and many of the world's largest banks, according to ledgerinsights.com. Deutsche Börse was the first major investor in HQLAᵡ and operates a significant part of the infrastructure as a trusted third party enabling tokenization.

As cointelegraph.com notes, according to the "Horizon 2026" report published on November 7, Deutsche Börse aims for "an expansion of the leading position in the area of digital platforms for existing and new asset classes".

The stock market operator believes that, in the long term, there is "additional growth potential based on new technologies, through the digitization of assets".

• Deutsche Börse's profit rose 7% in the third quarter

Deutsche Börse last month reported a smaller-than-expected 7% rise in its net profit in the third quarter of 2023, but raised its full-year estimates. Net profit attributable to shareholders was 400.3 million euros ($421.68 million), up from 373.3 million euros a year ago, Reuters notes. Analysts had expected a profit increase of around 14%.

The operational costs of the stock market operator increased by 13%, up to 505 million euros, more than analysts expected: 476 million euros. The number of employees and inflation contributed to the increase in costs, said Deutsche Börse.

The German market operator informed that it will exceed its objectives for the whole year. He expects around 5 billion euros - revenues for the whole year, up from previous estimates of 4.5 billion - 4.7 billion euros. At the same time, Deutsche Börse predicts earnings before interest, taxes, depreciation and amortization of approximately 2.9 billion euros, up from the previous estimate of 2.6 billion - 2.8 billion euros.