Announced today: TeraExchange has announced that they have completed the first bitcoin derivative trade to be executed on a regulated exchange platform. According to the announcement, the trade was executed between digitalBTC and a hedging counterparty.
From today’s announcement:
[blockquote style=”2″]The TeraExchange USD/Bitcoin swap provides institutional market participants with the first regulated risk transfer mechanism to hedge or gain exposure to bitcoin. All trading of USD/Bitcoin swaps on TeraExchange, a regulated swap execution facility, are now subject to the rules and regulations of TeraExchange and the CFTC. [/blockquote]
“There is significant, growing demand for a hedging instrument like this,” said TeraExchange CEO and co-founder, Christian Martin. “Not only does the swap provide a much-needed risk management tool but it instills confidence and credibility to the entire Bitcoin community at a vital time in the market’s development.”
“We are delighted to be working closely with TeraExchange and are excited they have created a regulated platform for institutional traders,” adds Bill Brindise, Chief Investment Officer at digitalBTC. “This swap is an important investment vehicle that has been sorely needed by bitcoin investors, retailers and miners. Like TeraExchange, digitalBTC is no stranger to regulation since stock exchange listing requirements mandate complete transparency into our business activities and financial reporting.”
TeraExchange adds they have worked closely with the CFTC (U.S. Commodity Futures Trading Commission) for over six months “to ensure that the swap and the Tera Bitcoin Price Index satisfied the rules and regulations of the federal regulator.”
“The CFTC Staff was pragmatic in their approach and comprehensive in their analysis, and after months of refining the swap and the index we are excited that bitcoin derivatives trading has commenced on our platform.” said Leonard Nuara, co-founder of TeraExchange.
The initial trade, according to TeraExchange, coincides with today’s CFTC Global Markets Advisory Committee meeting, which includes a bitcoin derivatives-based discussion between the CFTC and the public.