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Besides XRP, SIX is also planning to launch several other crypto-ETPs by the end of 2019, in partnership with financial services company Amun AG.
The popularity of XRP token continues to remain high as the cryptocurrency continues to maintain its position as the third-largest digital currency by market cap. Moreover, Ripple has been promoting its XRP-based products to institutions for instant cross-border payments.
Currently, Switzerland’s largest stock exchange SIX is planning to soon launch crypto exchange-traded-product (ETP), for XRP. The CoinDesk report states that the new crypto-ETP by SIX will track the price of XRP token.
In November 2018, the SIX exchange launched a multi-crypto ETP in partnership with London-based financial technology firm Amun AG. The ETP product tracked the top five cryptocurrencies by market cap. Further, listed under the “HODL” index, the multi-crypto ETP targetted institutional and retail investors.
Speaking to CoinDesk, Hany Rashwan, co-founder of Amun AG, said that his company has received approval from SIX exchange for issuing the XRP-based ETP under the ticker name AXRP. Rashwan also said that “we expect to release the world’s first XRP ETP within the next two months.”
The announcement for XRP-based ETP comes just in a weeks time after SIX announced the Ethereum-based ETP launch last week.
Complete Collateralization of XRP ETP
As per SIX exchange’s listing rules, ETPs have no active investment strategies as they are passive investment instruments. Thus, these ETP products don’t come under the direct supervision of Switzerland’s financial regulator – FINMA. However, for listing ETP-like derivative products, SIX exchange has its structural features for crypto ETPs in place.
Thus, the XRP ETP by SIX shall fulfill all mandatory requirements pertaining to investor protection efforts. Rashwan explains that each unit of Anum’s Crypto ETP will be collateralized and backed by the same number of crypto assets with continuous monitoring. “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,” he added.
Rashwan also said that besides XRP, Anum recently received the permission to list crypto ETPs for four other digital assets. This includes Bitcoin Cash (BCH), Litecoin (LTC), Stellar Lumens (XLM) and EOS. With SIX’s plans to introduce more crypto ETPs, Amun AG is also planning to add more custodians across different jurisdictions.
A practice circular from SIX notes that the exchange will only consider top 15 digital currencies by their market cap for listing. Furthermore, SIX will support only those cryptocurrencies “with open-source software that function according to the principles of blockchain”. The exchange adds that “Tokens, in the sense of units from a project, which are often issued as part of an initial coin offering, are not permitted as underlying instruments”.
Plans to Tokenize ETPs
Preparing itself for the launch of more crypto ETPs ahead, Amun plans the tokenization of ETPs. For this, Amun will launch an ERC-standard token on the Ethereum blockchain and completely administered by itself. On its platform, Amun would allow tokenization of gold-backed traditional ETPs as well as crypto ETPs. In the long run, Amun plans to list the ETP token on the securities tokens exchange.
Besides, SIX also plans to launch a new blockchain platform along with its native cryptocurrency. It will develop the entire infrastructure using R3’s Corda Enterprise platform.
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