The American territory has been a sensitive issue for crypto, especially by regulations, although from time to time there is good news. From now on, any resident of the United States with a government-issued ID will be able to trade bitcoin physical futures contracts on the LedgerX platform.
Recently LedgerX has officially launched the first bitcoin futures contracts in the United States. Thanks to this, any type of client, whether retail or institutional, trade under this modality using an identification document and approving a KYC process.
This means that the service will not be limited only to institutional clients with millions in assets, but to a whole community of interested investors.
LedgerX CEO Paul Chou said that retail investors will be able to trade this new product using the company’s new platform that began operating recently, called Omni. Meanwhile, institutional clients can trade futures contracts, as well as any of the other LedgerX products.
Is LedgerX the first one to do this in the United States?
Although LedgerX is not the first provider of futures contracts in the United States, it is the first to offer physical bitcoin futures contracts, which means that customers will actually receive the bitcoins they were trading at the time it expires. the operation, instead of receiving its cash equivalent.
In fact, customers will not need to deposit US dollars to trade this product. According to Chou’s explanation, customers can buy the contracts using bitcoin.
Chou clearly explained that these contracts are not only physically delivered, meaning that customers can receive bitcoins after the futures contract expires, but they can also deposit bitcoin first.
Chou also states that this is the first time that a regulated company is able to allow its customers to deposit bitcoin as collateral for a contract. Thanks to this, customers will not have to wait for bank transfers, or for any other limitations established by the United States banking system to participate.
For retail customers
Originally, LedgerX has been working on it since the end of 2018 when it consigned to the CFTC all the necessary requirements to apply for licenses. The agency granted the company a license for designated contractual markets (DCM) last month, which LedgerX already had all the necessary approvals to start operating.
The company’s emphasis had to do with opening these types of options for retail customers, who generally cannot participate in the most popular Bitcoin futures markets precisely because they do not have large amounts of fiat money to operate the contracts.
In this regard, Chou commented:
“Cryptocurrencies are for everyone and therefore we don’t just want to offer them to institutional clients”
Meanwhile, TradeBlock research director John Todaro said that physical contracts will allow merchants more adequate coverage, which would be beneficial for all types of customers.
LedgerX enters a competitive market
Bitcoin futures have caught the attention of the United States, since at least 2017, when CME and Cboe announced that they would launch futures contracts paid in cash. While Cboe finalized support for its products earlier this year, CME continues to enjoy a considerable volume of trade.
TD Ameritrade, the online stock giant, also offers its clients access to CME futures contracts.
However, Chou mentioned that LedgerX is not necessarily competing with cash-paid contracts. It is for something that the two types of contracts are completely different.
“We really have a lot of teammates who have never even touched American dollars.”
LedgerX has a high performance team and that makes it a good company. There are currently several companies are planning to offer physical bitcoin futures in the United States.
Bakkt, which was established by the parent company of the New York Stock Exchange so acclaimed last year and ErisX backed by TD Ameritrade, both have announced their intentions to enter this market.
Bakkt has self-certified its contracts through the CFTC, and is waiting for a trust from the New York Department of Financial Services to establish its reservation. Once the trust is approved, Bakkt will probably be able to launch his proposal in a few weeks.