The US Commodity Futures Trading Commission has granted digital currency-trading platform LedgerX, the first licence to clear and settle derivative contracts on bitcoin and other cryptocurrencies, Reuters has reported. The licence authorises the New York-based firm to provide clearing services for fully collateralised digital currency swaps. LedgerX initially plans to clear bitcoin options, the CFTC said in a statement, published yesterday.
LedgerX’s chief executive officer Paul L. Chou CNBC that the firm planned to launch bitcoin options in early fall, with a roll-out of ethereum options to follow “within few months”
"A U.S. federally-regulated venue for derivative contracts settling in digital currencies opens the market to a much larger customer base," Chou also said, as quoted by CNBC.
"We are seeing strong demand from institutions that previously could not participate in the bitcoin market due to compliance restrictions against unregulated venues,” Chou added. He noted that there was demand from fund managers for assets that weren’t correlated with the broader stock market, and cryptocurrencies met that need.
Chou, who also sits on the CFTC's Technology Advisory Committee, also revealed that it took more two years to secure the licence, in part due to due to a long education process.
The CFTC clarified that the approval “does not constitute or imply a Commission endorsement of the use of digital currency generally, or bitcoin specifically".