Distributed database that is used to maintain a continuously growing list of records, called blocks
The U.S. Commodity Futures Trading Commission (CFTC) has given permission to the New York-based institutional trading and clearing platform for digital currencies LedgerX to exchange and clear any number of cryptocurrency derivatives.
Is the first decentralized peer-to-peer payment network that is powered by its users with no central authority or middlemen
After three years of work, the company was granted a rare derivatives clearing organization (DCO) license, which allows to clear and custody financial instruments backed by Bitcoin, Ethereum and other blockchain-based cryptocurrencies. In fact, initially, LedgerX anticipates listing one to six-month options contracts for BTC. Other digital currency contracts such as ETH, are expected to follow.
Is an open-source blockchain-based distributed computing platform featuring smart contract functionality, which facilitates online contractual agreements
LedgerX will provide the surveillance and transparency institutional investors require. Eligible participants in the LedgerX venue will include registered broker dealers, banks, futures commission merchants, qualified commodity pool entities and qualified high net worth investors.
We are seeing strong demand from institutions that previously could not participate in the bitcoin market due to compliance restrictions against unregulated venues. In particular, there is a desire for fund managers to hold financial instruments that are not correlated with the broader equity market, and digital currencies meet that need.
Paul L. Chou
CEO of LedgerX
Gary DeWaal, of Katten Muchin Rosenman LLP, who assisted LedgerX during its CFTC application process, also commented on the approval claiming that LedgerX’s registration is a historic milestone for derivatives and for digital currencies. To him, "it is equivalent to the launch of currency futures back in 1972 that heralded the beginning of exchange-traded and cleared derivatives based on financial products.”