SIX Swiss Exchange, Switzerland’s principal stock exchange based in Zurich, could list an XRP Exchange Traded Product soon.
This was made known in a report in BlockCrypto, on Monday. The XRP ETP, which is floated by Swiss crypto startup Amun AG, will be launched under the “AXRP” ticker. The exact launch date of the XRP ETP is unknown, but buyer interest will play a part in the upcoming ETP. Amun also announced a $4 million funding round from Boost VC founder Adam Draper, son to Bitcoin bull and VC Tim Draper and Graham Tuckwell, the guy who built ETFs for gold.
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Not the First ETP
Last year, SIX listed Amun’s crypto ETP under the ticker “HODL” amidst the market collapse. The ETP currently tracks the value of five major cryptocurrencies namely Bitcoin (BTC), Ripple (XRP), Litecoin (LTC), Bitcoin Cash (BCH), and Ethereum (ETH). This will be the fourth crypto exchange-traded product launched by Amun, as it had also issued bitcoin and ethereum ETPs on the Swiss exchange.
Amun’s crypto ETP was organized to follow the strict policies and rules that govern traditional ETPs. It’s safe to say the same rules would apply with the XRP ETP when it finally launches.
“Unlike actual assets such as stocks or gold, an index doesn’t have its own price, but displays a value representing the prices of an underlying group of assets according to its specific calculation methodology. For example, S&P 500 is calculated by taking the sum of the adjusted market capitalization of all S&P 500 stocks and then dividing it with an index divisor, which is a proprietary figure developed by Standard & Poor’s,” the company had noted.
ETPs are a bit similar to exchange-traded funds (ETFs) as they allow both institutional and accredited retail investors invest in cryptocurrencies without going through custodians or jumping through the regulatory hoops along the way.
Amun’s crypto basket ETP has been a success so far on the SIX Swiss Exchange, and it is currently leading the ETP charts for volumes traded. However, while the volume for HODL has surpassed that of the other ETPs, both the turnover and price have been on a downward spiral. Last month, around $4 million HODL changed hands, while the price has fallen from $15 in November to about $13, which reflects the overall market decline.
SIX is Blazing the Crypto Trail
ETPs are not treated as collective investment schemes on SIX, which is why Amun’s ETPs are not subject to approval from the Swiss market regulator, the Federal Financial Market Supervisory Authority (FINMA). However, the exchange requires every derivative listing to fulfill some requirements that ensure investor protection. One of this requirement is for each unit of the ETPs to be collateralized and backed by an equal amount of cryptocurrencies, which is monitored by the exchanged and checked regularly.
Switzerland’s principal stock exchange also has plans to launch a digital asset platform dubbed SDX, in the second half of this year using the blockchain. The imminent blockchain-powered exchange would be built on the R3 Corda Enterprise—a paid version of R3’s open source Corda platform that is suited for use with capital markets infrastructure, insurance, and other service applications.
@Mcdtv announcing on stage at #cordaday in Singapore that the Swiss Exchange SIX has selected #corda Entreprise to tokenize assets! This is big!
With @inside_r3 and @antony_btc pic.twitter.com/D50NRreEoK
— Frédéric Dalibard (@FrdricDalibard1) March 7, 2019
Beyond the development of the exchange, the financial market provider will also use the distributed ledger technology to tokenize stocks and exchange-traded funds (ETFs). In a recent interview with Reuters, SIX chairman Romeo Lacher said the exchange is yet to finalize a launch date for the platform, as it’s subject to regulatory approval from FINMA. The company expects its SDX digital exchange to blow its current marketplace out of the water in less than a decade.