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What's New In Investments, Funds? - Schroders, Vontobel

Editorial Staff

2 October 2019

, the Swiss firm, says that it is the first issuer worldwide to offer a “classic structured product” for trading and custody using blockchain technology. 

The product works by using a “smart contract” that maps the traditional financial product to the blockchain. The firm is partnering with Lienhardt & Partner Privatbank Zürich AG.

A smart contract, according to one online definition, is “a self-enforcing piece of software that is managed by a peer-to-peer network of computers”.

Vontobel said its structured product is a tracker certificate based on the Vontobel Swiss Research Basket. 

The firm entered the blockchain market in 2016 by launching its first tracker certificate on Bitcoin. This was followed by the option of storing digital assets in the business’s “Digital Asset Vault”. In the case of this facility, customers no longer need to buy and store their cryptocurrencies on individual crypto-platforms, which can crash during volatile trading, or use a private security key to access currency, which if lost or stolen leaves users unable to retrieve the assets they have stored.

Among other Swiss firms in this space, Falcon Private Bank recently said that it accepts direct transfers of selected cryptocurrencies. Julius Baer, Switzerland’s second-largest bank, is collaborating with SEBA Crypto, a Swiss firm that straddles traditional financial services and the expanding cryptocurrency space, which continues to generate interest in spite of high volatility in such digital markets. The Zurich-listed private bank already embarked on an early-stage minority equity investment in the Zug-based firm last year.