In a press release LedgerX has announced that its application with the Commodity Futures Trading Commission (CFTC) is going to become a swap execution facility (SEF) and a derivatives clearing organization (DCO) soon. According to it if approved, LedgerX would be the first US regulated Bitcoin derivatives exchange and clearing house.
Thus, once approved LedgerX is all set to become a place where institutions could obtain Bitcoin assets and hedge digital currency fluctuations. The press release says that regulated derivatives exchanges play an important role in the development of financial markets and the decision by the company is going to enhance the same.
James E. Newsome, Ph.D., former Chairman of the CFTC, former CEO of NYMEX, and one of the two independent directors on LedgerX’s board was quite optimistic when he said that digital currency derivatives present a huge opportunity, but to gain mainstream adoption, a regulated market will need to be developed.
He believes that by providing liquidity and a secure venue for investors to manage short and long-term risk, LedgerX will facilitate the evolution and adoption of these products. According to the press statement if approved by the CFTC, LedgerX will list asset-settled derivatives products based on the digital currency Bitcoin, including options to purchase or sell Bitcoin.
Like James E. Newsome, Paul Chou, CEO and co-founder of LedgerX too showed his confidence and admitted that options are powerful financial instruments that can turn one of the concerns related to Bitcoin – historically high volatility – into an opportunity for both investors and hedgers.
Buy and Sell Bitcoin to Be Offered
Thus, LedgerX which was created to offer merchants, financial institutions, market makers and other financially-sophisticated market participants a solution for managing market exposure in digital currencies through the use of regulated, exchange-traded and centrally-cleared derivatives products is all set to embark in the Bitcoin industry with a bang.
Also, according to the company it intends to be the first US based, US banked, and US federally regulated derivatives exchange and clearing house for Bitcoin and other digital currencies. The management team of the company is comprised of Goldman Sachs, MIT and CFTC alumni, who bring financial expertise, technical talent and regulatory experience to the firm.
Also, as LedgerX has recruited Thomas K. Lewis, Jr., former CEO of Ameritrade and former CEO of Green Exchange, to its board of directors, it will benefit from their experience.
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