The Börse Stuttgart Group says that it has built the largest digital and crypto business of all the European exchanges. And this is increasingly reflected in the group's financials. The share of revenues from the digital business has grown significantly in recent years compared to traditional capital markets activities. „Today, digital business accounts for 20% of our revenues at the group level“, Matthias Voelkel, CEO of the Börse Stuttgart Group, says in an interview with Börsen-Zeitung. Moreover, this is not a substitution for, but a complement to, traditional business.

Voelkel clarifies how his company distinguishes between digital and capital market business. Stock trading has, of course, been electronic for a long time. „When I speak of digital, I mean based on blockchain technology“, he explains. The Börse Stuttgart Group's digital business comprises three areas. Firstly, institutional crypto business, where the exchange group acts as a crypto infrastructure provider. For example, it provides custody and trading infrastructure for cryptocurrencies to DZ Bank, and thus the entire cooperative financial group. „In other words, we enable customers of cooperative banks to access Bitcoin, Ether etc,“ he says. Secondly, the Börse Stuttgart Group operates its own crypto retail business under the brand Bison. The number of customers at Bison has increased by 7% since the beginning of the year. The third area of business is listed tokenised assets.

The BX Digital exchange for tokenised assets is likely to go live in Switzerland in the second half of 2024. In Voelkel's view, Switzerland has innovation friendly regulation in this area with fewer restrictions than the EU's DLT Pilot Regime. Settlement at BX Digital will be in Swiss francs, not for example in stablecoins. „Furthermore, our system operates without a central depository“, the CEO emphasises.

Börse Stuttgart has chosen Switzerland precisely because of the innovation-friendly regulation, and because the commercialisation of digital assets is already further advanced there. However Switzerland is by no means the only foreign market the exchange is eyeing.

„In addition to Switzerland and Scandinavia, where we are operating stock exchanges, we are also looking at countries like France, Spain, and Italy", says Voelkel, and the exchange is already „in talks with some European banks and brokers, including large institutions.“ The goal is to become their infrastructure provider in the digital and crypto space. „We can help these banks and brokers ensure that their customers have reliable access to digital assets and cryptocurrencies", he says. “This doesn't require Börse Stuttgart Group to expand its infrastructure. It is already in place – and now we're offering it beyond German borders.“

Voelkel makes it clear that Germany, still accounting for 80% of revenues in both capital markets and digital business, is „our home market“. However, the German market has its limits, and offers only restricted growth opportunities. Therefore it makes sense for the group to increasingly focus on foreign markets: „We've grown within Europe, and aim to continue expanding across the continent", he says. Growth, and economies of scale, are crucial because the technological costs and regulatory requirements for setting up and operating platforms are high. And both capital markets and digital are platform businesses.

Finally, Voelkel addresses the issue of fees. „Having the Euwax AG as a strong broker within our group enables us to offer low-fee or zero-fee platforms", he says. Börse Stuttgart is well set in Germany, but as it embraces a European perspective, it will also be launching a low fee model in Switzerland.

Voelkel assesses the cannibalisation effects of such offerings on existing business as very low. These are different customer groups. „Some are concerned with saving fees", he explains. "For others, liquidity, spread, and execution quality are central.“