trueEX has confirmed plans to roll out a regulated derivatives marketplace for digital assets in a bid to win business from institutional investors looking to enter the cryptocurrency market.
The firm said initial contracts will available be for Bitcoin non-deliverable forwards (NDFs) settled in USD, listed under a new brand ‘trueDigital’ on its existing swap execution platform, pending regulatory approval.
The trueDigital contracts will be subject to licensing and services agreements with the newly created trueDigital Holdings business, which will act as the sales and marketing arm for new products.
The swap execution facility said despite digital assets including Bitcoin and Ether comprising in excess of $430 billion in market capitalisation, the marketplace has been lacking regulatory and technology building blocks for institutional involvement.
“Institutional investors and commercial partners are ready for a regulated and liquid marketplace to gain exposure to and hedge these increasingly important digital currencies and commodities,” said trueEX co-founder and CEO, and CEO of trueEX Digital Holdings, Sunil Hirani.
“The marketplace is sorely lacking the necessary foundation, infrastructure and platforms that institutional investors have come to expect in other important markets.”
ED&F Man Capital will act as the first futures commission merchant (FCM) to offer prime brokerage services on digital asset forwards on trueDigital.
Brooks Dudley, vice president of risk at ED&F Man Capital, explained NDFs are the next logical step for institutional investors seeking exposure to Bitcoin and other digital currencies.
“[Hirani] is a proven innovator in financial products and market infrastructure, and one of the earliest advocates for the use of digital assets in institutional finance. We’re looking forward to working with his team at trueDigital,” Dudley said.
trueEX also announced it will team up with blockchain software provider ConsenSys to develop a benchmark rate for digital asset Ether, and to develop the infrastructure for the broader adoption of cryptocurrencies by institutional investors. ConsenSys was recently selected to support a new initiative by the European Commission, to monitor and engage with the development of European-based blockchain projects.