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The new partnership is aimed at building an infrastructure necessary for a wider adoption of crypto-trading products by institutional investors, including banks and investment funds.
One of the leading startups in the ethereum ecosystem, ConsenSys, has teamed up with TrueDigital, an affiliate of global online exchange for interest rate swaps trueEX, to develop a benchmark rate for the price of ethereum (ETH), the world’s second largest cryptocurrency .
The two companies are going to create a target reference index for ethereum prices as the first part of a broader project to make digital assets available for the institutional community.
Meanwhile, the trueEX exchange announced that it is planning to launch a derivatives marketplace for trading virtual currency assets to bring confidence for investors. The initial product is a bitcoin contract, which will be settled in USD and listed on the firm’s current swap platform under the “trueDigital” brand. At the moment, it is waiting for approval from the US Commodity Futures Trading Commission.
“Institutional investors and commercial partners are ready for a regulated and liquid marketplace to gain exposure to and hedge these increasingly important digital currencies and commodities, but the marketplace is sorely lacking the necessary foundation, infrastructure and platforms that institutional investors have come to expect in other important markets,” said Sunil Hirani, the founder of TrueDigital, in a press-release.
Brooks Dudley, Vice President of Risk at ED&F Man Capital Markets, the first FCM with plans to provide prime brokerage services for digital asset forwards on TrueDigital, commented: “NDFs on digital assets are the logical next step for institutional investors who are seeking exposure to Bitcoin and other digital currencies. Sunil is a proven innovator in financial products and market infrastructure, and one of the earliest advocates for the use of digital assets in institutional finance. We’re looking forward to working with his team at trueDIGITAL.”
Currently, the overall market cap of virtual assets, including bitcoin and etherum, exceeds $430 billion. Although the marketplace continues to attract interest of investors, it still lacks regulatory and technology building blocks required for institutional participation.
Based in New York, trueEX is the first trading platform approved by the Commodity Futures Trading Commission as a Designated Contract Market (DCM) for swaps. Since its launch, the exchange has registered more than $9.7 trillion in trading volumes and $20.7 trillion in post-trade processing services.
trueEX enables the trading of interest rate swaps, a complex financial tool that can be used by institutional investors to simplify exchanges of digital assets. The platform has also been featured on the Forbes Fintech 50 and Institutional Investor Tech 50 rankings as one of the most innovative fintech companies.
TrueDigital, in turn, offers research and product development for the derivatives listed on the trueEX exchange and also operates sales and marketing for the new products.