Seed CX Begins Testing Swap Contracts Settled in Real Bitcoin

August 13, 2019
67 Views

Bitcoin derivatives provider Seed CX has begun testing its margin swaps products with users, the company said Tuesday.

Investors can now onboard to try out Seed CX’s swaps product matching platform during the testing period through its subsidiary Seed SEF, a regulated swap execution facility (SEF), the company announced

Seed CX’s CEO Edward Woodford told CoinDesk that the testing would allow market participants to test both their connections to the marketplace, as well as the products themselves “to ensure they are working as expected.”

“We’re very excited to have begun user testing of our physically-settled bitcoin derivative product,” said Seed CX president Brian Liston in a statement. “We’re at the final step.”

Woodford told The Block that the company could launch its live swaps product over the next three months.

“The three-month timeline is not firm, as we are waiting on regulatory approval and therefore it is not in our hands to control,” he clarified to CoinDesk, adding:

“We are ready from a technology standpoint. The other factors that can influence our timeline is the regulators’ views on these products.”

In his statement, Liston said that once testing is concluded successfully and regulators have reviewed, the company “will be able to launch a much needed margined, physically-settled digital asset derivative to U.S. customers.”

Race to market

A number of firms are looking to offer physically-settled bitcoin derivatives, in which clients receive the actual bitcoin underlying a contract on expiration, in the U.S.  To date, LedgerX is the only one to provide swaps and options products, which it offers to both institutional and retail clients.

However, Seed CX wants to become the first to offer physically-settled products on margin, meaning investors can enter a leveraged position.

The company has previously announced its intention to offer bitcoin forwards, a product similar to the bitcoin futures that Intercontinental Exchange’s Bakkt, LedgerX and ErisX are hoping to offer customers. TrueDigital is also looking to launch bitcoin forwards.

While futures are standardized contracts traded on an exchange, forwards can be customized between parties and are traded over-the-counter. Clients can use both to bet on the price of bitcoin at some future date.

According to Tuesday’s press release, Seed CX intends to offer nine different contracts simultaneously: four weekly contracts, three serial monthly contracts and two quarterly monthly contracts. Weekly contracts will expire on Fridays, while the monthly and quarterly monthly contracts will expire on the third Friday of the relevant months.

Seed CX, the parent firm to Seed SEF, launched a bitcoin spot trading market in January, offering institutional clients trading and settlement services.

Seed CX office courtesy Seed CX

https://www.coindesk.com/seed-cx-begins-testing-swap-contracts-settled-in-real-bitcoin

You may be interested

Bitcoiners Brace for More Performance Art and Another ‘Satoshi Reveal’
Crypto News
29 views
Crypto News
29 views

Bitcoiners Brace for More Performance Art and Another ‘Satoshi Reveal’

btcethereumadmin - August 17, 2019

On Friday, a variety of paid press releases were published stemming from a company called Satoshi Nakamoto Renaissance Holdings, a…

Passing the Burden of Negative Rates to Bank Clients Opens Door for Cryptocurrencies
Crypto News
29 views
Crypto News
29 views

Passing the Burden of Negative Rates to Bank Clients Opens Door for Cryptocurrencies

btcethereumadmin - August 17, 2019

Record low and negative interest rates have put commercial banks in a difficult spot. Across Europe, they have been passing…

Bitcoin Price Analysis: Higher Lows Test Bullish Resolve
Bitcoin Price
22 views
Bitcoin Price
22 views

Bitcoin Price Analysis: Higher Lows Test Bullish Resolve

btcethereumadmin - August 17, 2019

Summary: After a very strong round of selling that dropped the price almost $2,000 in just a couple of days,…

Leave a Comment

Your email address will not be published.