US CFTC Grants ErisX License for Physically Delivered Digital Asset Futures Contract

The Commodity Futures Trading Commission (CFTC) of the US has granted a license for physically delivered digital asset futures contract as derivatives clearing organization.

ErisX begins a new journey

On Monday, ErisX announced that Eris Clearing was granted derivatives clearing organization (DCO) license by the US CFTC under the Commodity Exchange Act (CEA). Its other platform Eris Exchange has been holding a Designated Contract Market (DCM) license since 2011. The company’s venture into digital assets and the subsequent green light by the futures regulator suggests regulatory growth for the controversial coins.

Talking about their recent license grant, ErisX CEO Thomas Chippas said,

“ErisX is unique in that for our digital asset market, we have divided the trading and settlement functions using traditional DCM (exchange) and DCO (clearing) models. This reflects the structure that institutional investors expect from other asset classes and will help drive these markets toward greater relevance and accessibility.”

How will ErisX change the digital coin landscape?

As Eris Clearing is now a registered DCO, it can now clear the digital assets futures contracted that are traded on its regulated derivative markets. This service will launch next year as Eris Clearing has to comply with 17 core principles of the CEA. It will include protections for participant funds and members, rule enforcement policies, standards and procedures set for members and risk management capabilities.

ErisX general counsel Laurian Cristea said that their clearinghouse works on the principles laid out by relevant regulations that help in protecting market integrity. These principles will also be applied to their spot market, launched recently. She said that the launch of the spot market and getting a DCO license were to of the crucial enterprise goals the company intended to meet this year. She noted that when futures on digital currencies launch later in the year, users will get to trade on a unified spot and futures platform for digital assets.

DRW’s chief executive officer Don Wilson noted that developing an infrastructure akin to traditional financial markets will help in eliminating roadblocks for institutions investors in the digital currency ecosystem. This will eventually lead to the maturation of the markets.

Susquehanna International Group’s Dean Carlson noted that ErisX had worked tirelessly with the authorities to create an environment that brings digital assets within the ambit of time-tested principles followed in traditional markets. Their framework will help in bringing security, transparency, and familiarity for investors.