trueDigital to List First-Ever Margined, Physically Delivered Bitcoin Swaps
October 3, 2018 | New York
Contracts Clear Path for Greater Institutional Investment in Digital Assets
trueDigital will launch the first margined, physically-delivered Bitcoin swap contracts, enabling institutional investors to manage exposure to Bitcoin in a similar way to how they currently trade and hedge foreign exchange and commodities.
The trueDigital derivatives contracts have been self-certified by affiliate trueEX’s CFTC-regulated swap execution facility (“SEF”), and will be listed on its exchange subject to SEF rules after a ten-day self-certification period.
Physical delivery of a derivatives contract requires the underlying asset to be delivered upon the contract maturity date. This differs from the prevailing method of cash-settled derivatives, which has come under scrutiny as anonymous spot pricing contributions on unregulated exchanges are more susceptible to market and price manipulation.
“We’ve received consistent market feedback that institutional investors want a physically-delivered product because it addresses the challenges and issues that arise from the manipulability of cash-settled derivatives,” said Nick Goodrich, Director of Business Development at trueDigital. “The product will resemble instruments institutions are comfortable with, and will be a key building block in the institutional digital asset market.”
trueDigital will initially list contracts in the next three serial months and quarterly maturities, with settlement on the last Friday of each maturity month.
Formed in March 2018, trueDigital is launching a regulated derivatives marketplace for digital assets. This follows the launch in July this year of the first market maker-based Bitcoin and Ether indices for institutional markets, to which ten market makers have agreed to contribute or plan to contribute, including Genesis Global Trading, Circle, XBTO Group, DV Chain, Hehmeyer, Altonomy, Tilde, and Elwood.
The self-certification filing made to the CFTC is available on www.trueex.com.
About trueDigital Holdings LLC
trueDigital Holdings, LLC, a New York-based global financial technology company, provides innovative solutions to financial markets utilizing blockchain-based technologies to enable frictionless asset transfer and settlement. trueDigital has also created the first-of-its-kind margined deliverable swap contracts on Bitcoin as well as the first institutional OTC-based digital asset reference rates.
trueEX LLC operates the first exchange approved by the Commodity Futures Trading Commission (CFTC) as a Designated Contract Market (DCM) for swaps. 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 since its launch. www.trueex.com.