Seed CX tests physical settlement of bitcoin swap contracts, scheduled to launch within three months

According to Coindesk's August 14 report, Bitcoin derivatives supplier Seed CX announced on Tuesday that it has begun testing customers with margin swaps.

Screen Shot 2019-08-14 at 10.07.56 AM (Source: Coindesk )

The company said investors can try Seed CX swaps through its subsidiary Seed SEF, a regulated swap execution platform, during testing.

Seed CX CEO Edward Woodford told CoinDesk that the test will allow market participants to test their products “to ensure that work is as expected”.

Brian Liston, president of Seed CX, said in a statement:

We are very excited to let users test the bitcoin derivatives of Seed CX physical settlement, and now it is the last step.

Woodford told The Block that the company may launch real-time swaps in the next three months.

But he clarified to CoinDesk:

We are not sure if we can launch the product within three months and are awaiting approval from the regulatory authorities, so we cannot control the specific launch time of the product.

He then added:

We have already prepared for the technical aspects. Other factors that may affect the launch are the perception of the regulators about these products.

Liston said in a statement that once the swap product was tested successfully and reviewed by regulators, the company "will be able to introduce a digitally-deposited digital asset derivative that requires margin to US customers."

Competitive market

Many companies are seeking to provide physical settlement of Bitcoin derivatives (its potential customers will receive Bitcoin when their contracts expire). So far, in the United States, LedgerX is the only platform that offers swaps and options products. It was previously targeted at institutional investors, but has recently opened to retail investors.

However, Seed CX hopes to be the first company to offer a margin settlement product, which means investors can use leveraged positions.

The company has previously announced its intention to offer bitcoin forward transactions, similar to the bitcoin futures products that Intercontinental Exchange's Bakkt, LedgerX and ErisX wish to offer to customers. TrueDigital is also seeking to launch bitcoin forward transactions.

Futures is a standardized contract that is traded on an exchange, but forward contracts can be customized between the parties and traded off-site. Customers can use two contracts to place a bet on the price of Bitcoin in the future.

According to a press release on Tuesday, Seed CX intends to offer nine different contracts simultaneously: four weekly contracts, three consecutive monthly contracts and two quarterly contracts. The weekly contract will expire on Friday, while the monthly and quarterly contracts will expire on the third Friday of the corresponding month.

Seed CX launched a bitcoin spot trading market in January this year to provide trading and settlement services to institutional clients.

We will continue to update Blocking; if you have any questions or suggestions, please contact us!

Share:

Was this article helpful?

93 out of 132 found this helpful

Discover more

Blockchain

Bakkt also can't impact traditional cryptocurrency futures trading? - Coin, OKex, Matcha, and the same station

Text | Mutual Chain Pulse · Liang Shan Hua Rong Mutual chain pulse: Although Bakkt has not been able to detonate...

Opinion

Unveiling the FTX Empire's 'Second-in-Command' The Glorious and Falling Journey of Chinese Genius Programmer Gary Wang

What has Gary Wang gone through, from being a close friend of SBF to becoming the COO of FTX and a key witness?

Blockchain

The Bitcoin exchange is very hot, but the soil of the economics is very thin.

According to the coinmarketcap market data, the trading volume of Bitcoin in the past month exceeded the intra-month ...

Blockchain

Exchange captures EOS super nodes

The rise of Staking's economy has driven the business of PoS mining and has broken the power structure of EOS su...

Bitcoin

OKX will launch a signal strategy and has now opened a signal provider recruitment.

The signal strategy function is expected to be officially launched in August to September 2023. This function will al...