TrueEX to Launch Regulated Digital-Asset Marketplace
Swaps execution facility operator trueEX LLC plans to launch a regulated derivatives marketplace for digital assets, to deliver the confidence and transparency that institutional investors have been seeking.
The initial contracts will be for bitcoin non-deliverable forwards (NDFs) settled in USD and will be listed under the “trueDigital” brand on the existing trueEX swap execution platform, pending review with the US Commodity Futures Trading Commission.
Digital assets, including bitcoin and ether, now comprise in excess of $430 billion in market capitalization. While attracting greater institutional interest, the marketplace has been lacking the regulatory and technology building blocks needed for institutional involvement and participation.
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.
At the same time, TDH will enter into a strategic partnership with the leading blockchain venture studio, ConsenSys, to develop a benchmark rate for Ether and the infrastructure needed for the broad adoption of digital assets by the institutional community. Ether is the second largest digital asset after Bitcoin.
“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.
The firm provides CME Group with the CME CF Bitcoin Reference Rate.
The new offering will support cryptocurrency and token-based trading.
Blockchain Board of Derivatives combines speed of centralisation with security of decentralisation.
But will they surive the regulatory learning curve?
(VIDEO) AlphaPoint's Igor Telyatnikov says institutions see DLT as a way to move into new markets.