The renowned crypto exchange, Bitfinex, is expanding its product line beyond crypto assets and is rolling out an equity index derivatives which will settle in the controversial stablecoin Tether (USDt).
According to a press release shared with Bitcoin Exchange Guide, the perpetual contracts will be on Europe 50 and Germany 30 and are set to go live on Monday. The firm also clarified that the new offering would provide its clients with exposure to conventional stock markets.
Europe 50 represents the STOXX Europe Index that covers about 50 stocks based in 18 countries in Europe. On the other hand, Germany 30 is a representative of the Deutscher Aktien Index (DAX), which covers Germany’s 30 most significant stocks listed in the Frankfurt Stock Exchange.
According to the press release, every contract will provide up to 100x leverage, and USDt will be used for settling.
An equity derivative can be equated to a traditional futures contract; however, it comes with no expiry and operates like a margin-based spot market. Bitfinex Derivatives CTO, Paolo Ardoino explained:
“THIS IS THE FIRST TIME THAT AN EXCHANGE FROM THE DIGITAL ASSET SPACE HAS LAUNCHED A PRODUCT THAT BRIDGES THE GAP WITH TRADITIONAL STOCK MARKETS, REPRESENTING A SIGNIFICANT MILESTONE IN THE EVOLUTION OF CRYPTO AS AN ESTABLISHED ASSET CLASS.”
Ardoino also explained that Bitfinex was motivated to move to the traditional markets by CME moving to Bitcoin futures. Ardoino says that the new product will help in improving cross-asset trading initiatives in the crypto space.
Ardoino also explained that since the new offering will settle in USDt and will help in the reduction of forex as well as interest rate risks. This will also aid in ensuring that the trading is seamless as well as efficient, said Ardoino.
The new product will be available in the selected countries and only for verified users. This means that traders wishing to trade the new product will need to go through the various due diligence aspects to verify their source of funds, identity, and banking history.