Crypto and Derivatives are Mutually Beneficial
ErisX is excited to announce that, after the successful completion of our acquisition by Cboe today, we are now a Cboe Global Markets Company. We will continue to build world class, regulated infrastructure and operations for cryptocurrencies under the new brand Cboe Digital. The complementary combination of ErisX and Cboe will leverage ErisX’s digital-first spot and regulated futures technology, licenses and operations with the support of Cboe’s resources, relationships, global operations and distribution to achieve our shared vision of mature, scaled markets for both traditional and digital assets.
The rise of crypto products represents a transformative development for the derivatives industry, which encompasses the futures and options markets. Cboe got the drop on the industry with its announcement of its planned acquisition of ErisX, but there has been a quick succession of additional M&A as crypto exchanges moved to buy remaining independent CFTC-licensed exchanges setting the stage for exciting growth and innovation in US-listed derivatives.
ErisX built a full-stack Commodity Futures Trading Commission (CFTC) regulated exchange and clearinghouse for cryptocurrencies from the ground up. Our proprietary exchange and clearing technology along with our Designated Contract Market (DCM) and Derivatives Clearing Organization (DCO) licenses position Cboe Digital to compete on its own terms without the reliance upon third-party providers of trading or clearing services. Our exclusive focus on the digital markets means that we are driven to offer innovative products and services that meet the needs of the digital industry: we were the first to offer Ether futures on a CFTC regulated market, and our clearinghouse enables seamless and easy physical delivery and custody of crypto commodities. The support of Cboe will enable us to scale our efforts.
Cryptocurrencies and blockchain technology are a welcome jolt of energy and opportunity for forward-looking leaders in the commodity derivatives industry. We are a beneficiary and catalyst of the rise of this new asset class. ErisX, soon to be Cboe Digital, was designed and built with regulatory compliance and operational integrity at the forefront. We leveraged high-performance infrastructure and real-time market surveillance. As the crypto derivatives markets mature, we know real-time clearing is crucial for scale and scope. Our real-time clearinghouse was designed to address settlement risk while collateral management helps to allow seamless and efficient movement of collateral between spot and futures accounts.
The opportunities, products, markets and new participants that stem from building a new asset class are exciting. We will carry forward the many accomplishments we are proud of at ErisX and we look forward to doubling down on the work of ErisX as Cboe Digital and welcoming the crypto community to ongoing innovations we have planned for the U.S. regulated derivatives markets!
