Bitcoin Bourse Stuttgart Stock Exchange becomes first regulated market with cryptocurrency trading

The regional stock market wants to be in the vanguard of digital asset trading. But it’s also taking a huge risk and it has to rely on non-German platforms for the actual buying and selling.
Quelle: Ulrich Baumgarten/Getty Images
(Source: Ulrich Baumgarten/Getty Images)

The Stuttgart Stock Exchange is launching what it claims is the first trading platform for Bitcoin and other cryptocurrencies operated by a regulated exchange.

The regional stock exchange seeks to be in the vanguard of those helping cryptocurrencies go mainstream and to avoid the fate of Germany’s other regional exchanges of slipping into obscurity in the shadow of the Frankfurt Stock Exchange operated by Deutsche Börse.

The cryptocurrency platform is a pet project of Alexander Höptner, the former IT chief at Deutsche Börse, who joined the Stuttgart exchange in 2017 and took over as chief executive a year ago. He will rely on two cryptocurrency exchanges, Bitstamp in Europe and Kraken in the US, where the actual trading will take place before developing a platform of his own.

Höptner, who also founded two startups for trading virtual assets, enjoys a reputation as a digital thought leader and wants to make cryptocurrencies and digital assets part of Stuttgart’s DNA.

“In the past we thought too hard about what the financial industry wanted,” says Höptner. “Now the question is what does the customer want? We have a unique opportunity to put ourselves on the leading edge of the next technological revolution, tokenization.”

Tokenization embraces not only cryptocurrencies but also real assets represented in virtual form by digital tokens using the blockchain technology introduced by Bitcoin in 2009. Bitcoin will be among the first traded in Stuttgart along with rival cryptocurrencies Ethereum, Litecoin and Ripple.

A Bitcoin app for beginners

Trading takes place on a mobile phone app, Bison, which has been beta-tested by Handelsblatt along with 400 others.

“We want trading in cryptocurrencies to be as simple and convenient as share trading with an online broker,” says Uli Spankowski, who headed up development of Bison with his firm Sowa Labs, which the Stuttgart exchange acquired in 2017.


Exchange officials have ambitious plans for Bison, hoping to top 10,000 users within three months and 100,000 within a year.

A regulated stock exchange has all the necessary licenses for trading, says Philipp Sandner, head of the Blockchain Center at the Frankfurt School of Finance and Management, and has the infrastructure to follow up on the first signs of suspicious money-laundering activity.

The goal of 100,000 users seems ambitious, Sandner said, given that there are only an estimated 800,000 crypto investors in Germany. “The Bison app should appeal primarily to beginners,” he said.

The Stuttgart launch looks particularly bold coming at a time when scandals and thefts have brought cryptocurrencies into some disfavor. Hackers have attacked the crypto-exchanges and the wallets holding individuals’ cryptocurrencies and made off with billions.

One scandal could sink the company

“The crypto-market is highly speculative and it’s possible to lose everything,” Sandner says. “The Bison app has to have lots of warnings not to tempt beginners to gamble.”

Traditional company shares are securely held by custodians like Clearstream, but that’s not the case with virtual assets. The Stuttgart exchange has to build up its own custodian facilities. It is a risky business, because it is the exchanges and the wallets that hackers attack, not the blockchain itself, which has numerous built-in defenses.

Bison is a big risk for the exchange because a scandal could be a shipwreck for the entire company. Deutsche Börse has held back from cryptocurrencies because of the risk and lack of regulation and it has even backed off a plan for cryptocurrency futures – betting on the price development of the coins without actually buying or selling them – despite the fact that such futures have traded for more than a year in the US.

The actual trading for Bison takes place on a non-German platform, called Bitstamp, a London-based exchange founded by two Slovenians. Bison will soon also add a San Francisco-based exchange, Kraken. The Stuttgart exchange’s Euwax unit then acts as the counterparty for the customer, holding open the bid for 10 seconds before actually executing it abroad. The newly founded Blockknow unit could hold the cryptocurrency or it could be paid out.


Bison justifies the double fees paid by its customers, Stuttgart officials say, by offering a better user experience, easier payment by debiting your bank account, and a wallet to hold the acquired cryptocurrency. Plus, the operation comes under the supervision of a government regulator. “We are simply more trustworthy,” says Spankowski.

No risk, no fun

The tokens acquired have no deposit insurance, and whether a customer robbed by hackers will be reimbursed will be determined case by case. Euro accounts are hosted by Solaris bank and covered by normal deposit insurance.

Further down the road, the Stuttgart exchange would like to develop its own trading, rather than execute on the foreign exchanges. Then it would expand trading to tokens as well as coins. In the meantime, regulations would have to be updated because security tokens clearly fall under rules for securities which at present include a paper document somewhere.

But Höptner is willing to take the first step. “Entering the crypto trade is a balancing act between our quality standards and the existing market mechanisms,” he says. “I can’t be a ‘first mover’ without taking a risk.”

Felix Holtermann covers digital innovation in financial services for Handelsblatt and Andreas Kröner is a financial correspondent. Darrell Delamaide adapted this article into English for Handelsblatt Today. To contact the authors: [email protected] and [email protected].