Stuttgart Stock exchange is increasingly establishing itself as a leading digital player among Europe’s regulated exchanges. It has now expanded its offering, providing additional custody solutions for institutional clients and an ETP that is inversely correlated to Bitcoin.
Stuttgart stock exchange, Germany’s second-largest stock exchange, is one the most advanced digital exchange player in Germany. Just last month, its cryptocurrency trading app BISON celebrated its anniversary, with more than 80,000 users in twelve months since launch.
And the exchange keeps expanding its digital offering. After it launched its digital trading platform BSDEX in October last year, it is now expanding its cryptocurrency custody services to institutional investors and has listed a Short Bitcoin ETP.
Blocknox: Institutional-grade crypto custody solutions
According to an announcement from Tuesday, Blocknox, a subsidiary of Stuttgart stock exchange, already provides custody for crypto assets on an “escrow basis” and has made the service available to users of Boerse Stuttgart’s BISON app and its digital assets exchange, BSDEX. The goal of the service is to provide custody services for cryptocurrencies and “other digital assets” outside the group’s own offerings.
“As a pioneer in Germany, Blocknox has already been operating as a custodian of cryptocurrencies for more than one year,” said Dr. Ulli Spankowski, Managing Director of Blocknox and Chief Digital Officer for the group. “Now we want institutional clients to benefit from our experience and set-up as well. They can use Blocknox’s reliable custody as a building block for their own services around digital assets.”
The service aims at institutional clients such as banks and asset managers. It deploys a “multilevel security concept” to address the specific technological, operative, and regulatory requirements of institutional trading firms.
According to Blocknox representatives, the firm has already indicated to the BaFin its intention to apply for a crypto-license. Since January 2020, banks and other custody service providers must apply for such a license. Blocknox plans to submit the final application before the set deadline to become a regulated financial services provider.
Spankowski believes the new regulations will bring “further professionalization” to the crypto industry and will likely encourage more institutions to enter the market.
New listing: SBTC bets against Bitcoin
Apart from a broader range of custody services, Stuttgart stock exchange is also expanding its crypto listings. On 25 February, the exchange announced the listing of a Short Bitcoin exchange-traded product (ETP) with the ticker SBTC.
SBTC is inversely correlated to the cryptocurrency’s price swings. It offers investors a positive return whenever Bitcoin falls in value — minus a daily management fee. The product is fully hedged 1:1 with the corresponding underlying asset and has been issued a German securities identification code (WKN: A2781V).
It’s not a new product, however, as it has already been trading on the SIX stock exchange in Switzerland. The issuer 21Shares – formerly Amun – aims to reach a broader investor base with listing it in Germany as well. Hany Rashwan, CEO of 21Shares, said, “investors in Germany have demonstrated strong support for prior crypto offerings,” and the firm is responding to this demand.