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LedgerX Lands CFTC Approval for Physical Bitcoin Futures

An announcement by the U.S Commodity and Futures Trading Commission (CFTC) today clears crypto startup, LedgerX to become the first to offer physically delivered Bitcoin futures contract to the U.S populace.

The approval as per the update, hands LedgerX the license to exist as a designated contract market (DCM), adding to the company’s earlier registration with the CFTC as derivatives clearing organization (DCO).

Armed with these qualifications, the company now looks all but set to offer the long-awaited physical delivery of Bitcoin futures contracts. ‘Physically-delivered’ means that the company would issue units of Bitcoin upon the expiration of a client’s contract.

Operating under such a model would mean that the startup would not follow the pattern of existing Bitcoin futures trading venues CME Group and CBOE that settle client’s contracts using cash.

Also, while the former basically serves institutional clients, LedgerX can offer its product to both institutions and retailers.

Meanwhile, although obtaining CFTC’s approval temporarily leaves LedgerX in the driving seat to deliver the first physically-delivered contract in the U.S, close competitor, Bakkt is no longer far from launch.

Following LedgerX’s application for a DCM license with the U.S CFTC, we reported last month that Bakkt would begin user-testing for its Bitcoin Futures platform in July.

Other startups also in the running to deliver physically-settled Bitcoin futures include Seed CX and ErisX, although none of the duos is as close as LedgerX and Bakkt to launch the product.

 

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