Commodity Futures Trading Commission approves first bitcoin swap

Home » Commodity Futures Trading Commission approves first bitcoin swap
Image source:

Image source:

The bitcoin derivatives market just took a giant step forward. Reuters reports that the Commodity Futures Trading Commission (CFTC), the federal regulatory body responsible for preventing fraud in futures contracts, gave full approval to a new bitcoin-backed swap created by TeraExchange. The new derivative allows clients to lock in a dollar value to their bitcoin holders, essentially creating insurance against future price swings for the duration of the contract.

TeraExchange chief Christian Martin told Reuter: “For a merchant to take bitcoin, there wasn’t until this product a regulated way for them to put on a hedge to manage the risk … and now with this product they can.”

The company first announced the bitcoin swap plan in March, but it took six months of examination and review by the CFTC for the product to finally see approval. Much like the Winklevoss ETF’s WinkDex, TeraExchange was required to create a six-exchange price index before the CFTC was convinced that bitcoin prices were difficult to manipulate. Reuters noted that price manipulation is still a major concern for the CFTC in the wake of the Libor scandal earlier this year.

The CFTC approval is the first concrete recognition of a bitcoin derivative product by U.S. federal regulators. With the approval, TeraExchange can now begin marketing the product broadly. The company claims to have a group of around 50 clients on a waiting list for the product. The TeraExchange approval may also serve as a bellwether for other bitcoin-derivative and investment products on the horizon, most notably the Winklevoss Bitcoin Trust ETF, which is still in the SEC approval process.

New Casinos is the BEST Gamblefi online casino and sportsbook I have seen to date. Don't miss this one if you are into Crypto Casinos

Get 180 free spins and up to 5 BTC in bonuses

CasinoMax: 325% match bonus up to $9750 + 25 bonus spins for 7 consecutive days

400% welcome bonus up to $8000. 40x wagering requirement is required prior to your first withdrawl

Great Welcome Slot Bonus!

Claim a HUGE 500% deposit bonus with no maximum with Crypto

© Copyright 2024 The Best Crypto and Bitcoin Casinos and Sports Betting Sites | Bitcoinx
Powered by WordPress | Mercury Theme