It is being reported that Goldman Sachs is allowing a select few of its clients to sign up to its future crypto products.
The investment bank is planning to roll out its Bitcoin non-deliverable future contracts (NDF’s). A derivative product which is pegged to futures. Once implemented the service should allow an investor or borrower to take a short-term position in Bitcoin even though the government may not allow exchanges. Clients will use the foreign currency, but any foreign exchange gain or loss is to be paid in Bitcoin. This service has the potential to provide corporates with the facility to hedge exposure to foreign currencies whose use is restricted in the domestic market using Bitcoin, not dollars.
Earlier this year Chicago Boards Options Exchange (CBOE) announced that it would introduce an Ether-backed futures contract. However, that product is still not available yet.
Goldman Sachs is reportedly attempting to determine whether the market needs a crypto NDF contract. It is reaching out to its clients which include senior bankers and institutional traders to see how a Bitcoin NDF could break into the market.
CBOE and CME, offer crypto-based cash-settled future and future derivative products. The two exchanges have shown interest in crypto futures, suggesting that they would expand their offerings in the long run. CBOE, has stated that it wants to be the leader of the cryptocurrency derivative marketplace. CME, is already there but looks relatively less enthusiastic regardless of launching an Ether price reference rate.
Bakkt, a crypto startup headed by Intercontinental Exchange (ICE), the owner of the New York Stock Exchange (NYSE), has already announced that it will launch its first Bitcoin derivative product on December 12th The firm settles contracts physically, meaning the contract expiry dates sees an actual Bitcoin change hands.
LedgerX, another crypto derivative platform, is also seeking to launch an Ether-backed future contract and is currently pending approval from the Commodity Futures Trading Commission (CFTC).