Iconic, a German fintech startup, is planning to list crypto-backed products on stock exchanges in Frankfurt and Luxembourg.
According to German business news agency Handelsblatt, the company has filed a prospectus to list Bitcoin-backed exchange-traded notes (ETNs) and is planning to list the products on the exchanges by this December.
“Financial institutions and investors have been asking for an easy way to invest in Bitcoin and other crypto assets for many years. So far, they have not had an institutional product to do that,” Patrick Lowry, chief executive of Iconic, told the local news daily.
“Iconic has now developed a similar investment product in Europe and is pleased to be able to offer it on regulated marketplaces in Luxembourg and Frankfurt.”
Similar to exchange-traded funds (ETF), ETNs are also listed and traded on the exchanges. However, ETNs are unstructured products and act as a bond which can be held to maturity, bought, or sold at will.
Though based in Frankfurt, the company has approached Luxembourg's financial watchdog to regulate the upcoming derivative.
Per the report, the German startup will directly invest collected funds into Bitcoin, which then will be purchased by the European subsidiary of Coinbase.
The company is already operating one such crypto investment funds for wealthy clients in which the minimum entry amount is set at €100,000 (around $111,000).
ETN - an entry to ETF
Iconic is not the sole European player to enter the industry of issuing crypto derivatives. Stockholm-based XBT has launched a similar product in 2015, which has been listed on Nasdaq Stockholm exchange.
Meanwhile, SIX, a major Swiss stock exchange, has listed multiple crypto exchange-traded products (ETPs), allowing mainstream traders exposure to crypto investment.
However, regulators are still reluctant to approve a crypto-backed exchange-traded fund (ETF).
“Iconic has convinced both regulators and Deutsche Börse. The listing of their Bitcoin product on the Frankfurt Stock Exchange is a remarkable step [...] A true Bitcoin ETF Europe is thus a significant step closer,” Philip Sandner, head of the Blockchain Center of the Frankfurt School of Finance and Management, added.
