SIX Swiss Stock Exchange
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Swiss Stock Exchange SIX To Release World's First XRP Crypto ETP "AXRP" To Track Ripple Coin Value
XRP Exchange-Traded Product Coming To SIX
It seems the world’s first XRP exchange-traded product will be coming to Switzerland’s SIX exchange. The news was confirmed by Hany Rashwan, co-founder and CEO of the Swiss company Amun AG, who said that his firm has received approval from SIX to Launch an XRP-linked ETP which will go by the name AXRP on the SIX exchange.
“We can comfortably say that we expect to release the world’s first XRP ETP within the next two months,” he said.
This isn’t the only ETP that will be seeing the light of day soon as Rashwan says that they have also been approved for ETPs that will track the price of bitcoin cash (BCH), litecoin (LTC), stellar lumens (XLM) and EOS.
For now, the date of release of the ETPs has not been announced, but AG intends for all the approved ETPs to be launched by the end of 2019. The SIX Exchange has been very friendly towards the crypto industry and released an ETP for the top weighted crypto products in late 2018. The products that are part of the ETP are BTC, ETH, XRP, and LTC and are recorded under the name HODL. They also have ETPs that are linked to Bitcoin and Ethereum currently in operation.
Regulations And Rules
While the ETPs are listed on the SIX, they are also subject to a number of regulations and as a result, only about 15 tokens in the world are eligible for listing.
For starters, they are not considered as collective investment schemes that are subject to the supervision of Switzerland’s market regulator, the Federal Financial Market Supervisory Authority (FINMA). Instead, they are looked at as passive investment instruments.
They do, however, need to be collateralized and have a corresponding amount of Cryptocurrency Backing them up.
“The collateral also has to be kept at an independent qualified custodian. The calculation of the price is checked multiple times a day by several parties,”
Rashwan said, also stating that AG keeps its collateral with Kingdom trust, a custodian firm for both traditional and crypto assets registered with the Securities Exchange Commission in the US, though there are plans to introduce more as time goes on.
The rules of the SIX also allow for only the top 15 tokens by capitalization to be listed. On top of this ICO coins are prohibited.
“Tokens, in the sense of units from a project, which are often issued as part of an initial coin offering, are not permitted as an underlying instrument,” the stock exchange states.
R3 Corda Blockchain is the DLT of Choice for SIX Swiss Stock Exchange for Equity Tokenization
Swiss stock exchange operator Six Group has recently announced that they are choosing R3’s Corda Enterprise platform as the underlying blockchain for their upcoming digital asset trading, settlement, and custody service.
Corda Enterprise is a commercial distribution of Corda, our open source blockchain platform, specifically optimized to meet the demands of modern day business. Corda is designed to bring participants to a consensus on shared facts, removing the need for costly and time-consuming reconciliation.
Corda Enterprise is fully interoperable with Corda open source, meaning companies using either can trade with each other, and that one organization can run both platforms seamlessly across different divisions. It is the world’s only open-source platform that is 100% compatible with the enterprise version.
SIX Digital Exchange’s (SDX) Chief Digital Officer Sven Roth Said:
“This was very important to us because when we assessed different vendors, some of them were very focused on niche offerings and limited in their scope to very specific areas, such as post-trade for instance, and we didn’t want to be limited to just that area of expertise. We assessed a lot of vendors and technology stacks – all the ones you can imagine.”
According to the Chairman of the exchange, Romeo Lacher, the SIX Digital Exchange will be running parallel to the current SIX platform. The current services allow customers to complete a trade in three steps and often in several days. Now, those steps will be performed using distributed ledger technology (DLT) in just a few seconds. Lacher says that the supervisory board is currently discussing some details with the regulatory agency of the country, the Finma. The new course is expected to overtake the traditional trading platform within a decade from now.
As reported earlier by BitcoinExchangeGuide, Roth confirmed that the platform will be ready for launch in the second half of 2019.
“A selection of those [asset classes] will be available at launch. Then we have others living at the [central securities depository] of SIX today that then will be tokenized. We said we first want to have products that are only available on our DLT because then you don’t have issues with split liquidity, with transfers between the two CSDs and so on.”
Blockchain-Powered SIX Swiss Stock Exchange 'SDX' Continues Developing Its Trading Platform Plans
Blockchain-Powered Swiss Stock Exchange Continues Its Developing Plans
The SIX Swiss Exchange, the main stock exchange in Switzerland and one of the largest in Europe, announced that it wants to launch a digital trading platform SDX. The blockchain trading platform will be establishing a new way of trading as soon as it is launched this year.
One of the main things regarding the Swiss Stock Exchange is that they have a flexible timetable for the development of this digital trading platform. During the Worlds of Exchange Conference in Zurich, Romeo Lacher explained that their plan for SDX was still on course.
As reported by the local news site Swissinfo.ch, the launch date could be moved for the last months of 2019 or the beginning of 2020 if necessary. Nevertheless, they explain that the exchange will be ready for users to benefit from the securities trading revolution.
The SIX exchange has a turnover of around 5.2 billion Swiss Francs (CHF) per day. Moreover, it has a market capitalization of 1.67 trillion CHF, close to $1.6 trillion. According to the group’s CEO, Jos Dijsselhof, the company chose distributed ledger technology (DLT) because of the improvements in efficiency and security that will be introduced to the different stages of trading and settlement.
The CEO explained that it takes a buyer around two days to own stocks, even when the trader takes just a second to purchase that specific stock. However, there are other archaic processes such as settling payments and transferring titles.
On the matter, Dijsselhof commented:
“If we put it all on our digital exchange, then the whole process takes only a few seconds. This makes the market more efficient, but at the same time also takes risks out of the system.”
If the exchange becomes fully digital, there will be an improvement on the system and risks will be reduced for participants and investors.
The Australian Securities Exchange (ASX) has also announced that it is working on implementing blockchain technology for equity transactions. The main intention is to replace the old system used by the ASX called CHESS. Moreover, the Commonwealth Bank of Australia (CBA) has already issued a public bond using distributed ledger technology.
There are different firms and institutions around the world that are using DLT to improve their services. JP Morgan Chase is now working on the development of its own digital asset called the JPM Coin.
Institutional Investors Buy BTC via SIX Swiss Stock Exchange's Bitcoin ETP During Crypto Bear Market
Institutional investors appear to be buying the dip this past week. The Swiss bitcoin ETP has experienced record volume amidst the lowest bitcoin prices in a year.
The falling price of bitcoin has coincided with record volume for the recently-launched bitcoin ETP. The exchange traded product (ETP) is listed on the SIX Swiss Stock Exchange.
Based on this volume, it seems institutional investors are “buying the dip” by accumulating bitcoin when prices are low.
The bitcoin ETP is listed under the “HODL” ticker symbol. It was launched by Amun Crypto in November 2018.
Over the past week, the ETP has experienced record trading volumes. Last Thursday and Friday, for example, the fund recorded trading volumes of 53,233 shares and 62,986 shares, respectively. To put those numbers in perspective, the average volume over the previous month was around 20,000 shares per day.
Analysts are seeing a strong correlation between ETP trading volume and the declining price of cryptocurrency. As crypto prices drop, volume increases.
Financial analyst Su Zhu (@ZhuSu), for example, tweeted a breakdown of how trading volume on the HODL ETP corresponds with price:
In more straightforward terms, Zhu has noticed a consistent negative correlation between price and trading volume on the HODL ETP. As the price of bitcoin falls, trading volume increases. As the price of bitcoin rises, trading volume decreases.
How The HODL ETP Works
The bitcoin ETP consists of fully collateralized and non-interest-paying bearer debt security issued as a security and traded and redeemed within the same structure.
Although the product is often called a “bitcoin ETP”, it actually consists of several different cryptocurrencies. The fund is made of up 48% bitcoin, for example, as well as 30% XRP, and 17.6% Ethereum, with smaller shares of Bitcoin Cash and Litecoin.
It’s important to note that there’s a major difference between a bitcoin ETP and a bitcoin ETF. The launch of a bitcoin ETF is expected to kickstart a bull market – if an ETF is ever approved. An ETP, however, is different. An ETP is not subjected to the Collective Investment Schemes Act, or CISA, which means it is not supervised by FINMA.
Institutional investors might not be the only ones buying the dip. A report last week suggested that bitcoin users in Argentina and Venezuela were also accumulating bitcoin during this prolonged bear market, according to data from LocalBitcoins. Venezuela and Argentina are two countries known for their heavy bitcoin usage. In Venezuela, for example, bitcoin has become increasingly popular as the country undergoes a period of hyperinflation with its fiat currency.
Are institutional investors making a smart investment by buying the top 5 cryptocurrencies through the HODL ETP today? Or will prices continue to sink moving forward? We’ll have to wait and see.
Switzerland's SIX To Launch Exchange-Traded Product (ETPs) As Alternative To Exchange-Traded Funds
ETPs — Switzerland's Alternative To Exchange-Traded Funds
While the entire world is waiting for the US SEC decision regarding Bitcoin ETFs, Switzerland found another solution. The country's financial regulator, FINMA, confirmed that the exchange-traded product will arrive in Switzerland's principal stock exchange tomorrow, on November 21st. The ETP will track five top cryptocurrencies.
What Are ETPs And What Makes Them Different From ETFs?
ETPs are exchange-traded products which are being approved by Switzerland's stock exchange called Six Swiss Exchange. The ETP is being issued by Amun AG, headquartered in Zug, and it will track five largest digital currencies — Bitcoin, XRP, Ethereum, Bitcoin Cash, and Litecoin.
Despite the fact that Amun's website clearly states that this is only an ETP, many believe that it is actually a long-awaited ETF. However, these are two very different products, that do not fall under the same category. FINMA, the country's regulator, commented by saying that it is important to separate the two and understand why they are so different. The main reason is the fact that ETPs are not subject to the CISA (Collective Investment Schemes Act). As a result, they are not supervised by FINMA.
Alternatively, ETFs would be subject to the CISA, as they are funds that are traded and are normally tracking an index's performance. The same was confirmed by the Six Swiss Exchange, whose spokesperson added that this product will start trading on November 21st. They also stated that ETPs are similar to ETFs in a way that they trade in a multi market-making segment. However, they are not funds in a legal way. Instead, they are collateralized and noninterest-earning bearer debt securities. They can replicate an underlying asset which is usually from the sector of commodities.
Six Swiss Exchange went a step further in their attempts to explain Switzerland's passive financial products by making a clear difference between ETF and ETP. Their document also shows that ETPs will include ETNs (exchange-traded notes) as well as ETCs (exchange-traded commodities).
While ETNs are a kind of debt security that can be traded on exchanges with a promise of returns linked to a market index, ETCs provide exposure to various commodities. In addition, there are also different risks involved with ETFs and ETPs. ETFs are separate asset pools which can be segregated in case of the provider's bankruptcy, which means that there is no issuer risk involved.
The Public Does Not Understand ETPs
Back in September 2018, it became evident that ETPs are not understood properly. According to XBT Provider, its ETPs were massively misunderstood, which eventually led to the SEC suspending the trade of the firm's two products — Bitcoin Tracker One and Ether Tracker One. The suspension was supposedly caused by the inconsistencies in the products' descriptions.
The SEC stated that these are ETFs, which have not yet been approved, with other public sources describing the instruments as ETNs as well. Furthermore, the regulator states that they were characterized as 'non-equity linked certificates' by the issuer and that they are not principal protected, nor do they bear interest. Finally, the SEC announced that there is a clear lack of accurate information of these investment vehicles, which is confusing the public. As such, their trading will be suspended for the time being.