Bank Vontobel is the first issuer worldwide to launch a structured product as an asset token. The race for the tokenisation of traditional securities, in which many Swiss institutions are involved, thus remains exciting. Numerous other banks, the Swiss Stock Exchange and new financial institutions such as Seba Bank and Sygnum are also working on the digitization of shares and other securities.
In its structured product, Vontobel issues derivatives and thus controls the volume — unlike listed equities and bonds. The tokens remain stored in the Digital Asset Vault at Vontobel and only change from vostro to nostro wallet or vice versa during a transaction. Trading is documented and settled on the Smart Contract, which represents the financial product on the Ethereum block chain.
Marco Hegglin, Head of Business Management at Vontobel Investment Banking, makes it clear: “We retain control over the token”. In the event of discrepancies, the token can be paused via the smart contract so that no misuse is possible.
With its structured product, Vontobel addresses more than 100 financial intermediaries who already use global execution and custody services of transaction banking, including the Digital Asset Vault. Intermediaries can thus buy their digital assets within the infrastructure like conventional asset classes and deposit them with Vontobel as custodian.
The private bank Lienhardt & Partner is the first financial intermediary to offer the opportunity to trade these block-chain structural investments. As the partner institutions already settle with each other traditionally, no crypto francs are required as settlement currency, as would be the case with the tokenisation of conventional shares. This is another reason why tokenisation for structural investments has been faster. Vontobel is the first token product to offer a tracker certificate based on the Swiss Research Basket. The costs for the client are determined by the house bank that receives the structural investments. Since there are no stock exchange fees and brokerage fees for the issue via the blockchain, the blockchain structural investments should be cheaper than traditional products.