Cryptocurrency Derivatives Exchange Approved By CFTC As Designated Contract Market For Swaps
New York startup exchange trueEX is expanding into bitcoin, and plans to offer derivatives on that coin and other digital assets.
It is one of six US trading outlets to offer cryptocurrency derivatives in recent months. trueEX is the first exchange approved by the Commodity Futures Trading Commission (CFTC) as a Designated Contract Market (DCM) for swaps. In its capacity as an exchange and registered swap execution facility (SEF), trueEX has executed over $9.7 trillion in trading volumes and $20.7 trillion in post-trade processing services.
No date has been set for the start of the regulated derivatives marketplace for digital assets, but the initial contracts will be for bitcoin non-deliverable forwards (NDFs) settled in USD and will be listed under the “trueDigital” brand on the existingtrueEX swap execution platform, pending review with the Commodity Futures Trading Commission.
The trueDigital contracts are subject to a licensing and services agreement with a newly-formed affiliate of trueEX, trueDigital Holdings (“TDH”), that will provide product development, and act as the sales and marketing arm for the new products.
trueDigital will also enter into a partnership with blockchain venture studio ConsenSys to develop a benchmark rate for ether and will create the infrastructure needed for the broad adoption of digital assets by the institutional community.
“Institutional investors and commercial partners are ready for a regulated and liquid marketplace to gain exposure to and hedge these increasingly important digital currencies and commodities, but the marketplace is sorely lacking the necessary foundation, infrastructure and platforms that institutional investors have come to expect in other important markets,” said Sunil Hirani, founder of TDH.
“NDFs on digital assets are the logical next step for institutional investors who are seeking exposure to Bitcoin and other digital currencies. Sunil is a proven innovator in financial products and market infrastructure, and one of the earliest advocates for the use of digital assets in institutional finance. We’re looking forward to working with his team at trueDIGITAL,” said Brooks Dudley, Vice President of Risk at ED&F Man Capital Markets, the first FCM with plans to offer prime brokerage services for digital asset forwards on trueDIGITAL.
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