Citing demand for an efficient hedging tool, TeraExchange has developed a Bitcoin swap product and a Bitcoin price index, to launch the first regulated Bitcoin derivatives platform. <\/p>\n
While regulation has been lacking in the virtual currency world, TeraExchange, a registered SEF, said its launching the first regulated platform for Bitcoin derivatives along with a spot Bitcoin price index. <\/p>\n
As a swap execution facility, registered with the Commodity Futures Trading Commission, TeraExchange is structuring theBitcoin swap marketplace to be regulated under CFTC rules. <\/p>\n
This is the first regulated exchange, that has a regulated product and a regulated index in Bitcoins history, said Christian Martin, CEO of TeraExchange, in an interview today. <\/p>\n
In an announcement on Friday, TeraExchange said theBitcoin derivative and the Tera Bitcoin price index were created to meet the growing demand of global merchants, payment processors, miners, and hedge funds for an efficient hedging tool. Institutional market makers have already offered to provide continuous markets over a range of tenors going out one to two years, said Martin. <\/p>\n
In March of 2014 TeraExchange announced that an affiliate of the firm had created the first unregulated USD\/Bitcoin Swap, which sparked a considerable increase in demand for regulatedBitcoin derivatives trading and hedging, the company said on Friday. <\/p>\n
The process of creating a Bitcoin derivativeTeraExchange began the process of working with the CFTC in February this year. <\/p>\n
As an approved SEF, TeraExchange was able to self-certify the product and list it on its SEF. The CFTC approves that certification process. To be clear, the CFTC does not approve the product, explains Martin. We spent 8 or 9 months making sure the CFTC was comfortable with our product. <\/p>\n
At the end of the day, it was no different than listing an interest-rate swap contract. We were sensitive to the newness of Bitcoin, and with the newness comes diligence and time. <\/p>\n
Bitcoin price index as global benchmarkIn addition, TeraExchange developed theBitcoin price index, which is part of its commercial offering. The index was an important tool for us to develop because the index takes into account global data points, global underlying exchange input, and smoothes it all out so that any one input isnt any more important than others, says Martin. In that regard, our index is not susceptible to manipulations, which is one of the gating factors of the CFTC. <\/p>\n
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TeraExchange to Launch Bitcoin Swap Trading on Regulated SEF Platform<\/a><\/p>\n","protected":false},"excerpt":{"rendered":" Citing demand for an efficient hedging tool, TeraExchange has developed a Bitcoin swap product and a Bitcoin price index, to launch the first regulated Bitcoin derivatives platform. While regulation has been lacking in the virtual currency world, TeraExchange, a registered SEF, said its launching the first regulated platform for Bitcoin derivatives along with a spot Bitcoin price index. As a swap execution facility, registered with the Commodity Futures Trading Commission, TeraExchange is structuring theBitcoin swap marketplace to be regulated under CFTC rules Continue reading