Liquidity in the Swiss Security Token Market

Co-Author of the positioning paper of the Swiss Blockchain Federation that was published February 2025.

The Swiss Blockchain Federation paper “Liquidity in the Swiss Security Token Market” examines one of the key challenges facing tokenized securities: the creation of sufficient liquidity in secondary markets. While the tokenization of financial assets promises more efficient capital markets, the paper argues that without active and well-structured trading environments, security tokens risk remaining illiquid and therefore unattractive to investors.

The report analyses the structural reasons behind limited liquidity in current security-token markets, including fragmented trading venues, regulatory complexity, limited market-maker participation, and the lack of standardized market infrastructure. It highlights that liquidity is not only a technological issue but also depends on market design, governance, and the participation of regulated financial institutions.

In response, the paper outlines a set of recommendations aimed at strengthening liquidity in digital securities markets. These include improving interoperability between platforms, encouraging market-making mechanisms, developing standardized trading and settlement processes, and ensuring regulatory clarity for issuers, exchanges, and intermediaries. The report also emphasizes the importance of integrating tokenized securities into existing financial market structures to benefit from established liquidity networks and investor bases.

Overall, the paper concludes that building liquid markets for tokenized securities requires coordinated action from regulators, infrastructure providers, and financial institutions. By aligning technology, regulation, and market incentives, Switzerland can strengthen its position as a leading hub for digital securities and tokenized capital markets.

The full paper can be accessed here: https://blockchainfederation.ch/wp-content/uploads/2025/11/SBF-Liquidity-Paper-final_EN.pdf