CoinFLEX, a cryptocurrency platform spun from a U.K cryptocurrency exchange, CoinfloorEX, has announced plans to start trading of physically delivered Bitcoin futures.
Known in full as Coin Futures and Lending Exchange, CoinFLEX is owned by, among others, Roger ver who is among the early adopters of cryptocurrency especially Bitcoin. CoinfloorEX will also have a controlling stake in the new platform.
Although CoinfloorEX is based in the United Kingdom, CoinFLEX will offer physically delivered Bitcoin futures from Hong Kong.
According to Mark Lamb, the co-founder of Coinfloor, the offshore option was because:
In order to be a large, global exchange focused on traders, the best way to serve the market is to be offshore. Since crypto is a global audience and being regulated by one country would restrict who we can deal with elsewhere, we have chosen to be offshore in order to maximize our accessibility and the trust traders place in us.
Apart from physically delivered bitcoin futures, CoinFLEX will also offer futures for Ethereum (ETH) and Bitcoin Cash (BCH) “that can be leveraged up to 20 times.”
Lamb, while appearing on Bloomberg, noted that:
A key distinguishing factor in CoinFLEX’s favor is that all futures traded on the exchange will be physically delivered. That means when the contracts expire, owners will be given the underlying cryptocurrency instead of cash payments.
The launch of physically delivered Bitcoin futures by CoinFLEX will be competing with another one set to be launched by NYSE’s owner and another one by Eris Exchange.
The physically delivered Bitcoin futures contract will be against a stable coin, Tether. Therefore, upon maturation, shorts and longs will be settled with Bitcoin and Tether respectively. Lamb noted that Tether was chosen because it “is the most liquid” and has the highest volume.
Do you think CoinFLEX’s physically delivered Bitcoin futures will face stiff completion when other platforms launch similar products?
Let us know your thoughts in the comments section below.