TrueDigital and ConsenSys seeks ways to eliminate fund theft and hacks
TrueDigital partners with ConsenSys bringing new derivative to Bitcoin and Ether
The cryptocurrency startup ConsenSys backed by the credit-default swaps pioneer TrueDigital takes steps forward in bringing new derivatives contracts to Ether and Bitcoin. According to a statement by True Digital Holdings (TDH) on Monday, the company under Sunil Hirani alongside with ConsenSys plans to create a reference rate for Ether. These kinds of benchmarks are vital as they provide the price reference which traders utilize to calculate derivatives. TrueDigital plans to introduce such derivatives for the second largest cryptocurrency which is Ether, as well.
TrueDigital seeks United States Commodity Futures Trading Commission permission to provide non-deliverable forwards on Bitcoin. Currently there are such derivatives for digital currencies, especially in futures that CME Group Inc. and Cboe Global Markets Inc. each launched in December 2017. Hirani as the chief executive officer of the swaps trading platform TrueEX Group LLC, made a significant entry as he founded the Creditex Group. Ten years ago, Intercontinental Exchange Inc. bought Creditex Group which is a leader broker of credit-default swaps, for 500 million USD.
The trading platforms for digital currencies is still at an early stage with fund theft, hacks and breaking into systems during trade is abundant. Hirani plans to focus on providing clients access to over-the-counter digital products to show the maturity of markets;
You can’t come out and say we’re going to do everything on day one, you have to start somewhere… We want to be measured here.
TrueDigital Bitcoin NDF
The TrueDigital Bitcoin NDFs will be cash-settled. Several clients in the markets are requesting for a futures contract that delivers actual Bitcoin given it is held till expiration. Hirani doesn’t expose if this is what the company intends to do, but mentioned the following;
There seems to be a lot of demand from end-users and market-makers for a physically-delivered contract.
Hirani states that the Ether value reference rate will be created by a group of six to twelve market-making firms. But, the Cboe and CME will still rely on exchange-derived pricing for Bitcoin futures in their platform.
According to the vice president of risk at ED&F Man Holdings Ltd., Brooks Dudley, there are plans to offer clients prime brokerage services for the TrueDigital contracts;
NDFs on digital assets are the logical next step for institutional investors who are seeking exposure to Bitcoin and other digital currencies.