The Commodity Futures Trading Commission (CFTC) has given the green-light to LedgerX for futures trading with real Bitcoin. The Bitcoin derivatives product is a first such approval from the CFTC.
The CFTC has just approved LedgerX’s application for a designated contract market. The company can now offer futures contracts settled with actual Bitcoin. Previously, all Bitcoin futures markets were settled through IOUs.
LedgerX’s success will likely try to be emulated by other major firms looking to enter the Bitcoin derivatives market. Intercontinental Exchange’s Bakkt is one which immediately comes to mind, and as been in development for about a year now. The company is still waiting on confirmation from the New York Department of Financial Services.
We already do have Bitcoin futures exchanges on the Cboe and CME. However, these are cash-settled. LedgerX promises bitcoin-settled futures markets which means that the buyer will actually receive the underlying commodity.
However, LedgerX’s approval also opens up the door to retail clients, not just institutional ones. And that’s huge news for everyday consumers and crypto-enthusiasts.
LedgerX has still not laid out a definite plan when they will be rolling out these markets. However, they are looking to be the first in the United States.
LedgerX applied for the DCM back in November 2018 and has been working closely with the CFTC to be compliant. Now that they’re deemed compliant, it’s time to get everything going. “We have a pretty extensive waitlist and we’ll work through that until we feel comfortable,” LedgerX’s Chief Operating Officer Juthica Chou told reporters.
The approval may signal that the CFTC is becoming more open to cryptocurrencies.
Do you believe that the CFTC approval will further push Bitcoin’s towards institutional adoption? Let us know your thoughts below.
Image courtesy of Bitcoin Exchange Guide.