Crypto futures exchange Coin Futures and Lending Exchange (CoinFLEX) will introduce stablecoin-to-stablecoin futures contract, offering Tether (USDT) against Circle’s USD Coin (USDC), the company said on a Monday.
Established last year as CoinfloorEX, the platform will relaunch in February as CoinFLEX with Trading Technologies software and connectivity, and an Asian retail customer focus. It will offer futures contracts for Bitcoin, Bitcoin Cash and Ethereum that can be leveraged up to 20 times. CoinFLEX’s contracts will trade against Tether.
CoinFLEX is a spin-off from the Coinfloor Group, the UK’s oldest Bitcoin exchange. The company is owned by a consortium that includes Trading Technologies, which develops trading software for brokers and money managers, Bitcoin.com CEO and Bitcoin Cash promoter Roger Ver, crypto trader Mike Komaransky, Dragonfly Capital Partners, Global Advisors, B2C2, Amber AI, Grapefruit Trading and Alameda Research.
Coinfloor Group retains an equity stake in CoinFLEX and several key team members have been transitioned to the new company. Coinfloor Group co-founder Mark Lamb has relocated from London to Hong Kong to run the new exchange as CEO.
“We have an amazing team of employees and are backed by shareholders ranging from brilliant thought leaders in crypto to well capitalized and sophisticated market makers, in addition to Trading Technologies, one of the world’s leading futures trading platforms in the traditional markets,” Lamb commented.
“The market needs physical delivery in order for derivatives to become an order of magnitude larger than they are today. We are ready to serve crypto’s needs and massively grow the market.”
One of the exchange’s key differentiators is that all futures traded on the platform will be physically delivered. This means that when the contracts expire, owners will be given the underlying cryptocurrency instead of a cash payment.
“Crypto derivatives could become an order of magnitude larger than spot markets and the main thing that’s holding back that growth is the lack of physical delivery,” Lamb told Bloomberg. “Volumes are reduced because of a problem of trust when it comes to cash-settled trades.”
The announcement of the impending launch of the CoinFLEX platform comes at a time when an increasing number of firms are looking to offer physically delivered Bitcoin futures. Intercontinental Exchange (ICE), the owner of the New York Stock Exchange, plans to introduce such contracts shortly as part of its crypto venture called Bakkt.
Bakkt recently raised US$182.5 million from a group of high profile investors and venture capital firms including the Boston Consulting Group, Microsoft’s venture capital, PayU and the fintech arm of Naspers to drive institutional access for digital assets, along with merchant and consumer uses, the company said in December 2018.
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