Crypto Facilities, a London-based firm that provides regulated risk management and trading for digital assets, will become the first derivatives exchange to list regulated XRP futures contracts, Ripple Labs announced on its website. Ripple formalized its partnership with Crypto Facilities in February.
Crypto Facilities also partnered with CME Group, a Chicago-based financial exchange that operates some of the largest futures and derivative exchanges in the U.S., which has invested in Ripple.
The partnership with CME provides an added venue for trading XRP and a larger customer base. Crypto Facilities trading is mostly in Europe, Asia and Latin America, with plans to extend to the United States.
Extending XRP trading venues will boost the asset’s market efficiency and its price discovery.
Dr. Timo Schlaefer, Crypto Facilities CEO, said banks, traders and liquidity providers are holding large amounts of XRP and will now be in a position to use the new marketplace to trade and manage XRP risk.
Ripple’s cash-settled futures contracts on Crypto Facilities include a Ripple-dollar contract providing up to eight times leverage, and a Ripple-bitcoin contract providing up to five times leverage. Futures come with maturities of one week, two weeks, two-quarters and three-quarters.
Additional APIs and documentation are available from Crypto Facilities.
Crypto Facilities has professional standards for secure asset custody, regulatory compliance and counterparty credit risk management. The new product offering will adhere to these standards.
Ripple noted that XRP has proven governance and the fastest transaction confirmation of its type, offering global reach and rapid settlement finality to banks and liquidity providers. XRP allows the transfer of value any place in the world with less friction and barriers to entry than the regular banking system.
By making XRP available for trading, Crypto Facilities provides institutions holding XRP a way to manage downside price risk, thereby improving market stability. Hedging ultimately enables banks to capitalize on the real-time settlement speed and reach that XRP provides as a bridge currency.
Ripple noted its partnership with Crypto Facilities supports XRP as the most efficient digital asset for interbank settlement. In addition, the CEM/Crypto Facilities partnership demonstrates the long-term support for XRP and Ripple from its network of partners and customers.
Ripple noted in a disclaimer that no one residing in the U.S. should purchase XRP futures products until appropriate government approval is secured.
Images from Shutterstock and Ripple.