SDX, the digital asset arm of SIX, the pan-European financial market infrastructure, and Banque Pictet & Cie have tokenized corporate debt and allocated fractional quantities to portfolios managed by the bank’s asset manager, which could lay the foundation for the industry offering personalised portfolios at scale.

On 23 July 2025, SDX and Banque Pictet & Cie said in a statement that they concluded a joint pilot project. Euro- and Swiss Franc-denominated corporate bonds held in custody at SIX SIS were tokenized on the SDX platform, and then allocated in fractions to investors via the portfolios‘ custody bank account. Fractionalization allows assets to be divided into smaller investment sizes and enables a level of customization which would not be easily achievable via traditional systems.

David Newns, head of SDX, told Markets Media: “The pilot with Pictet is a milestone as the first example of a regulated financial market infrastructure (FMI) unlocking token-based fractionalization, which is a core capability inherent in blockchain technology.”

He described fractionalization as foundational to the deployment of tokenized securities because it fundamentally transforms how assets can be owned, traded, and accessed. Newns continued that the pilot very much lays the groundwork for a fundamental shift in how asset management services are structured and delivered.

“It acts as a catalyst for moving from a product-driven model to a client-driven model, where customization is at the centre,” he added.

Olivier Ginguené, chief investment officer multi asset & quantitative investment at Pictet Asset Management, said in a statement: “We are pleased to collaborate with SIX on this breakthrough project. It is the first time that tokenization and fractionalization have been combined in the Swiss market to enable real investments in traditional asset classes such as equities or bonds.”

Markus Dinkelmann, analyst, asset management at the Swiss Asset Management Association (AMAS) agreed that the combination of tokenization and fractionalization could be a “game changer” for the industry.

A working group of the largest Swiss asset managers is discussing tokenization with SDX in order for the whole industry to benefit from the new technology. Dinkelmann said the main benefits are increased flexibility, efficiency and potentially increasing investor reach, while allowing new portfolio construction models and more tailored smaller mandates.

“Tokenization could create new ways to serve clients by combining institutional quality products with individual delivery,”  Dinkelmann added.”The market could be like Amazon for an individual investor and that is quite exciting.”

However, Dinkelmann warned that in addition to technical challenges, such as integrating between traditional and digital infrastructures, there are also legal and tax issues that need to be resolved such as the clarification of fractionalized holdings under Swiss regulation.

Dinkelmann said: “We need to create an actual use case to solve a real issue or problem, and to be able to earn real money.”

Newns said that after proving the core components in the pilot, SDX will be working on practical solutions to satisfy the broader needs of Pictet and other asset managers in collaboration with the Asset Management Authority of Switzerland’s joint working group.

“Bringing together tokenization, fractionalization, and programmability provides the essential building blocks for achieving portfolio customisation at scale,” Newns added. “The next step is to activate additional capabilities inherent to blockchain technology—particularly programmability—to systematically manage the operational processes that support this customisation.”

Tokenization capabilities

Newns argued that SDX brings together a “unique” combination of capabilities including access to a huge pool of traditional securities through (central securities depository) CSD links with SIX SIS, asset tokenization, and the ability to apply smart contracts and programmability.

“Through our CSD links to SIX SIS (the traditional FMI operated by SIX) SDX has the ability to access and support the tokenization of a wide range of instruments available within that network — including securities issued outside Switzerland,” he added.

For example, an investor can acquire a bond or equity listed on an exchange in Spain, with the security held in a local CSD and accessed via CSD links into SIX SDX. SDX can use a delivery-free of payment (DfP) instruction to transfer the asset into the SDX CSD, where it is held in custody and represented as a token on the SDX blockchain. From that point, it can be fractionalized.

On SDX the underlying assets are held in custody within a regulated CSD, which Newns argued provides a more robust legal and operational foundation than relying on synthetic ownership structures through legal wrappers.

“Our architecture ensures a clear separation of roles between trading venues and custodians, and is built on a well-defined legal framework that safeguards investor rights and asset ownership,” he added.

Private markets

The pilot with Pictet involved corporate debt but Citi has announced that it will be tokenizing, settling and safekeeping assets on SDX’s CSD to bring late-stage pre-IPO equities to institutional and eligible investors by the third quarter of this year. Sygnum, the Swiss-based digital asset banking group, and SBI Digital Markets, the Singapore-based financial institution, will facilitate access to the pre-IPO equities that Citi will bring onto the SDX platform to their respective clients in Europe and Asia.

Newns said one of the reasons Citi chose SDX is because regulations in Switzerland lend themselves very well to digital securities. In particular, tokenizing a security on SDX does not change its legal definition, which he said is “really important.”

“SDX issues book-entry securities under regulations in Switzerland, securities which can be passported into other jurisdictions,” added Newns.

Therefore, when Citi issues tokenized securities on SDX, they can be held by investors in other countries in the same way as any other book-entry security issued under Swiss law, but they will have digital functionality.

Marni McManus, Citi country officer & head of banking for Switzerland, Monaco & Liechtenstein, said in a statement: “Private markets is a major and growing opportunity and our work with SDX promises to simplify and digitize what is essentially a manual and paper-driven industry today.”

Newns said there  has been a foundational shift that is making these opportunities more available.

“We are going to see more and more of these use cases that leverage the benefits of blockchain technology, but in a way that traditional finance is used to in terms of regulatory certainty, legal clarity and investor protection,” Newns added. “We can have the best of both worlds and our role as a trusted, regulated gateway between blockchain rails and traditional infrastructure is proving to be key.”

Newns continued that membership at SDX is increasing all the time. For example, Standard Chartered has signed a memorandum of understanding to deepen its collaboration with SDX. The bank plans to join SDX’s CSD platform for digital asset custody to access Switzerland’s digital securities ecosystem.

There are currently 15 digital bonds and over CHF 2.3bn in total digital issuances on SDX, according to the firm.

“These are real world use cases supported by some of the most significant names in the industry which is testimony both to SIX’s position as a pioneer in the digital asset space, and that these organizations have confidence in blockchain technology and digital assets more broadly,” said Newns.