LedgerX offering physical bitcoin futures contracts. The company announced Monday that it had filed for a designated contract market (DCM) license.
The DCM license would allow the cryptocurrency derivatives provider LedgerX to offer physically-settled bitcoin futures products to its customers. Unlike the products offered by the CME Group and previously, CBOE, customers would receive the actual bitcoin underlying a contract after the contract expires – rather than the US dollar equivalent.
LedgerX now hopes to attract retail investors with its newest offering, said Juthica Chou, the chief Risk and Operating officer at LedgerX.
“We’ll be able to service customers of any size, we won’t be restricted to [institutional clients],” Chou said.
LedgerX plans to offer Bitcoin, Bitcoin options, and Bitcoin futures to retail customers through a new platform – called Omni.
Omni is built on LedgerX’s existing infrastructure – it will act as the provider for both custody and trading services. Omni was given regulatory approval to launch in July 2017 – although the platform itself went live a few months after it was given approval for launch.
The hope is that Omni will use LedgerX’s existing liquidity to offer retail customers a top tier experience as soon as they use it. LedgerX states that a retail platform offering futures was always in their plans.
LedgerX has been engaged with regulators – there isn’t a roadmap or estimate as to when their DCM license will be approved – if it will be approved to begin with. The CFTC has already granted LedgerX two licenses – allowing them to act as a Swap Execution Facility (SEF) via Omni, and a Derivatives Clearing Organization (DCO) which is the clearinghouse. The DCM is just an additional license on top of their two already existing ones.
LedgerX has a leg up on the competition – competition that includes Bakkt, Seed CX, and ErisX. What do you think? Do you think that LedgerX will be the first company to offer physically settled bitcoin futures contracts? Let us know on our Facebook page!