Switzerland Approves First Crypto Exchange Traded FundDate Written: December 9 2018 Written By: Samantha Joule Fow
Once again, Switzerland has proven itself a force to be reckoned with in the age of digital currency. The progressive country has quite literally leapfrogged their way ahead of the competition and other countries in terms of applications of new technology. And while the U.S. has been holding its breath waiting for federal securities regulators to approve Bitcoin derivative funds, Swiss regulators have managed to get ahead of the game by installing the world’s first Crypto exchange traded product (“ETP”).
U.K.-based fintech company Amun Crypto is offering the first Swiss Crypto ETP, which will begin trading on Six Swiss Exchange. The Six is Switzerland’s chief stock exchange and the fourth largest exchange in Europe, and the listing of a crypto ETP represents a major leap forward in the mainstream applications of digital currency-based investments.
First Crypto ETP Includes Top Virtual Currencies
The ETP is designed to be used as a cryptocurrency market index based on the movements of five leading cryptocurrencies. The Swiss Crypto ETP includes investments in five sperate cryptocurrencies. The holdings are approximately allocated as follows: 3% Litecoin (LTC), 24.4% Ripple (XRP), 16.7% Ethereum (ETH), 48% Bitcoin (BTC), and 5.2% Bitcoin Cash (BCH).
Co-founder and CEO of Amun, Hany Rashwan, discussed how the exchange-traded product was crafted and how it meets the standards that have been set Swiss ETP. Rashwan also delved into how he expected the Amun ETP to affect and expose institutional investors to cryptocurrency exchanges, as many of those investors are restricted to buying and selling only securities, or may not want to go through the process of setting up a custody for digital investments.
Expected Impacts of Swiss Crypto ETP
The Crypto ETP will allow both accredited retailors and institutional investors to invest in digital coin assets. This means that the ETP will provide access to cryptocurrency exchanges to retail investors that previously did not have access to the digital exchange due to local regulatory obstructions.
This ETP implementation will further aid Switzerland’s application of financial technologies, which it relies upon to increase social and economic efficiency in activities associated with the use and processing of traditional cash. Additionally, the ETP will also assist people and businesses that are residing in remote, rural, and marginalized regions, where access to traditional banking is limited.
The cryptocurrency market and its relative community are all holding their breath in hopes that the world’s first multi-cryptocurrency ETP will speed up the adoption of cryptocurrency derivatives in other markets, including the U.S.. American regulators have yet to approve any Bitcoin or other cryptocurrency derivatives, though at least a handful of applicants have gotten close.
Despite how eager investors are for a cryptocurrency ETP, U.S. regulators have continued to reject applications to launch cryptocurrency exchange traded funds. The financial agencies have expressed concern that such vehicles could potentially expose investors to illicit or fraudulent acts. This has left all eyes turned towards Switzerland and the new Crypto ETP, which will the stage for how cryptocurrency derivatives will be implemented and regulated in the future.