Ripple & Certificate - an interesting symbiosis

Vontobel now offers investors access to the crypto currency "XRP" via a tracker certificate. The certificate is listed on the stock exchange and enables investors to participate easily and transparently in the price development of XRP.

For many investors, the market for crypto currencies has been an interesting and novel investment alternative for years. Vontobel was one of the first issuer in Sweden to make the simple and transparent investment in popular crypto currencies available to all investors via tracker certificates on Bitcoin and Ether. With the issue of the tracker certificate in the crypto currency «XRP», investors in Sweden are offered a further alternative to participate in the development of the crypto market.

Tracker Certificate on Ripple: How it works

With the Vontobel tracker certificate, investors participate in the price performance of Ripple (XRP) without having to have access to the Ripple network or a «Ripple Wallet» themselves. Accordingly, investors do not bear the risk of losing XRP due to hacker attacks, technical problems, improper handling or the failure of the XRP depositary. However, as with most tracker certificates offered, investors bear the risk of the issuer's insolvency in addition to the market price risk of the underlying asset and the currency risk (XRP is determined in USD while the certificate is denominated in SEK).

Product details

Vontobel is now offering the tracker certificate on XRP with no maturity date - a so-called tracker certificate open-end (Symbol: TRACK XRP VON; ISIN: SE0012729903). The product enables unlimited* participation of almost 1:1 in price gains and losses of the XRP. The well-known virtual marketplaces CoinBase Prime, BitStamp and Kraken serve as "reference agents" for the tracker certificate in the crypto currency "XRP" in US dollars. The first trading day of the new Open End Certificate on the stock exchange was on Thursday, 6 June 2019. From this date, investors are able to trade the certificate in the secondary market via their bank or broker and purchase or sell it at the respective bid/ask price.

Information about the underlying

Ripple is not a currency issued by a state or government but a virtual currency in the form of a so-called payment token within the Ripple network developed by RippleLaps Inc. («Ripple Network»). Ripple is a distributed system in the field of financial technology, which offers transactions in its own blockchain infrastructure. For a transaction in the Ripple Network, an entry currency must be converted into Ripple (XRP) and transferred via the Ripple Network. When a transaction is completed, the Ripple is converted back into the original currency.

Ripple exists only virtually on a computer network and has no physical counter value. Ripple trading is decentralized in the internet and does not need to be handled through intermediaries such as a state, central banks or commercial banks. Further information on Ripple can be found on the website ripple.com/xrp.

Like Bitcoin, Ripple (XRP) is based on blockchain technology. Unlike Bitcoin, however, Ripple is not a pure crypto currency, but a payment token - the currency - within the Ripple network. With a current market capitalization of over USD 1 billion, Ripple is the third largest crypto currency in terms of market capitalization after Bitcoin and Ether. The vision of Ripple's founders is to connect the world's financial systems, make payment transactions more cost-efficient and faster, and enable the secure transfer of assets in real time.

In order to make it easier for investors and interested parties to enter the Ripple universe, a special series on the functioning, background and development possibilities of Ripple will be published in the coming weeks.

*The term is basically unlimited, subject to termination by the issuer or exercise by the investor.