The US Commodities and Futures Trading Commission (CFTC) has approved LedgerX to offer physically-settled Bitcoin (BTC) futures contracts, industry website Coindesk has reported.
The CFTC announced yesterday that it had approved the New York-based company’s application for a designated contract maker (DCM). This comes nearly two years after the regulator granted the company a licence for derivatives clearing organisation. The new licence amends the previous registration, which limited LedgerX to clearing Bitcoin swaps. This now allows LedgerX to list Bitcoin futures on its DCM and, more importantly, to offer these products to retail customers, rather than just institutional ones, Coindesk notes.
In 2017, LedgerX became the first company to offer cryptocurrency in the US, but it was overshadowed later that year, as derivative marketplace giants Cboe Global Markets and CME Group launched Bitcoin futures contracts. Now the start-up aims to became the first US firm to offer physically-settled futures contracts. Unlike Cboe’s and CME’s respective offerings, which are cash-settled, in physically-settled futures the buyer receives the underlying commodity, in this case Bitcoin, when a contract expires, rather than a cash equivalent.
Several other companies are also looking to launch their own physically-settled BTC offerings. Among them is Bakkt, the Bitcoin platform of NYSE owner Intercontinental Exchange. Earlier this year, Bakkt revealed that it was looking to commence “user acceptance testing” for its two Bitcoin futures contracts on July 22. However, the platform has not set a launch date for the products.
In an interview with Coindesk, LedgerX’s chief operating and risk officer Juthica Chou highlighted the company’s ambition to be the first to offer the products in the US.
“There’s no doubt that we’re looking to be first, we’re looking to be the incumbent,” Chou said, as quoted by Coindesk. “We think we’re better positioned and we want to be there to serve customers of all sizes.”
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