CFTC grants ErisX as DCO

[Baofeng]

CFTC grants another approval of Monday:

https://cftc.gov/PressRoom/PressReleases/7954-19

Washington, DC —The Commodity Futures Trading Commission (CFTC or Commission) announced today that the Commission voted unanimously to issue an order granting Eris Clearing, LLC (Eris) registration as a derivatives clearing organization (DCO) under the Commodity Exchange Act (CEA).

Under the DCO order, Eris will be authorized to provide clearing services for fully-collateralized virtual currency futures.  Eris’ indirect parent company, Eris Exchange, LLC, is registered with the CFTC as a designated contract market.

The terms and conditions of the order require, among other things, that Eris comply with applicable provisions of the CEA, including the core principles in Section 5b of the CEA and with CFTC regulations.  Eris also must fulfill each of the representations it has made to the Commission relating to compliance with the core principles and CFTC regulations.

In response to a request from Eris, the CFTC’s Division of Clearing and Risk also today issued a letter granting Eris no-action relief from complying with certain CFTC regulations due to Eris’ fully-collateralized clearing model.

So last week it was Ledger X and now ErisX, it looks like we might see a lot of physical bitcoin futures contracts in the market being offered now. But the big buzz is around Bakkt approval and offering though, so we don't know the chances but it really looks very positive at this point. Let us wait if they will finally get their approval.

[squatter]

Another platform beat Bakkt to the punch, eh?

I'm not sure Bakkt made the right choice relying on a license from the New York DFS. Still, neither ErisX nor LedgerX has an ETA for their launch date, so there's still a chance they could be the first one to launch.

[gentlemand]

I'll wait for one to actually turn up and start running before becoming aroused by this.

And I wonder what the uptake will be vs dollar settled stuff. Ultimately most people in this space are only in it for the dollars. Perhaps those interested in Bitcoin settlement are delaying their dollar gratification but most won't have the interest or patience.

[Kemarit]

Another platform beat Bakkt to the punch, eh?

Exactly, Bakkt might be scratching their heads now, seeing another second company beat them to the punch.

I'm not sure Bakkt made the right choice relying on a license from the New York DFS. Still, neither ErisX nor LedgerX has an ETA for their launch date, so there's still a chance they could be the first one to launch.

Or maybe they think that crypto enthusiast is waiting for their approval, so they are not concerned about the recent LedgerX and ErisX. Bakkt has more players behind, I reckon. So again, although there is a approval in paper, if we don't have an ETA then it can't bring any positive effect to the market.

[1Referee]

And I wonder what the uptake will be vs dollar settled stuff. Ultimately most people in this space are only in it for the dollars. Perhaps those interested in Bitcoin settlement are delaying their dollar gratification but most won't have the interest or patience.

I'm pretty certain the guys over at ICE know how to attract institutional investors and have them use their platform. Most of these platforms (e.g. CME, Fidelity, Ameritrade) have a following of institutional clients, pension funds, family offices, etc.

I don't expect them to match CME in terms of volumes, especially with how it had enough time to build up clientele, but it's going to be in the hundreds of millions every week once they got up and running, that I am sure of. I don't think LedgerX will be able to do that, but it's still fantastic news to have them on board.

[BitHodler]

I'm not going to cheer yet because the demand for these instruments might not be there at all. It's great that the CFTC approved two proposals in a row, but what's it all worth when the volumes just aren't there?

Most of the institutions interested in Bitcoin trade at CME already, so it's going to be a difficult task to beat that. If something isn't exponentially better over what's available already, people don't tend to change to that.

I'll happily admit being wrong when the volumes indicate a high level of demand, but first it needs to happen. People here tend to jump on the hype bandwagon too quickly not realizing that it may turn out to be a flop.

[squatter]

I'm not going to cheer yet because the demand for these instruments might not be there at all. It's great that the CFTC approved two proposals in a row, but what's it all worth when the volumes just aren't there?

ErisX, LedgerX, Bakkt, Fidelity -- these companies are all trying to bring platforms online before the next bubble takes off. They won't create volume just by virtue of their existence, but the infrastructure being there when market hype really picks up could be a big deal.

Most of the institutions interested in Bitcoin trade at CME already, so it's going to be a difficult task to beat that.

The main question is whether there is (or will be) institutions who want to accumulate real bitcoins, as opposed to paper contracts. Physical delivery -- assuming significant bitcoin liquidity enters the futures markets -- could become a way for institutions to accumulate real bitcoin positions without ever touching unregulated OTC markets or spot exchanges.