European digital asset manager CoinShares has launched a new crypto asset ETP in Switzerland providing directly backed exposure to Ripple’s XRP.
Listed on SIX Swiss Exchange, the CoinShares Physical XRP (XRPL SW) is available to trade in US dollars, euros, or Swiss francs.
XRP, with a market capitalization of $160 billion, is currently the world’s third-largest cryptocurrency.
It is the native token of the Ripple network which aims to be a global settlement, remittance, and FX network that is similar to the SWIFT system used by banks and financial middlemen.
Rather than use blockchain mining, Ripple uses a consensus mechanism through a group of servers to confirm transactions. Ripple transactions use less energy than bitcoin, are confirmed in seconds, and cost very little.
XRP’s price fell more than 50% between 22 and 30 December 2020 following an announcement from the SEC that it would be suing the cryptocurrency’s developer, Ripple Labs, over unlawfully selling the token to retail investors. The SEC alleges that XRP is actually a security and, as such, its unregistered issuance broke federal securities laws.
XRP has, however, soared by nearly 600% since the start of the year following a series of legal victories in the ongoing trial.
Each unit of XRPL is “physically” backed with 40 XRP at launch, providing investors with direct exposure to the cryptocurrency with the added oversight, security, and liquidity of an ETP.
The ETP’s bitcoin holdings are custodied by Komainu, a hybrid institutional-grade digital asset custodian designed specifically for financial service providers and blue-chip corporates.
Komainu is a joint venture between global investment bank Nomura, digital asset security specialist Ledger, and CoinShares.
The ETP comes with a management fee of 1.50%.
Townsend Lansing, Head of Product at CoinShares, said: “We are excited to bring XRP to our physically backed ETP platform. At CoinShares, we build innovative products in response to demand from our clients. Once we determine that a professional-caliber product is feasible, and it appears that demand exists to make a liquid market for trading the product, we bring the product to fruition leveraging the extensive trading, custody, and compliance capabilities of the CoinShares Group.”
Frank Spiteri, Chief Revenue Officer at CoinShares, added: “The digital asset ecosystem is vast and still growing at breakneck speed. As we continue to diversify our product offering in 2021, we are focused on providing investment exposure to those assets and networks that resonate most with our European client base. XRPL is CoinShares’ second product launch of Q2, and we’re looking forward to building on this momentum in the months ahead.”
XRPL is CoinShares’ fourth directly backed crypto ETP, following products on bitcoin, ethereum, and litecoin. The CoinShares Physical Bitcoin ETP (BITC SW) has $370 million in assets and comes with a management fee of 0.98%, the CoinShares Physical Ethereum (ETHE SW) contains $90m and has an expense ratio of 1.25%, and the CoinShares Physical Litecoin (LITE SW) houses $20m and costs 1.50%.
CoinShares also offers eight single-asset crypto products providing exposure to bitcoin, ethereum, litecoin, and XRP in either Swedish krona or euro trading lines. The suite is delivered through the firm’s XBT Provider platform, with products listed on Nasdaq Stockholm and the Nordic Growth Market. These products use synthetic replication.