Brave New Coin (BNC), a New Zealand-based cryptocurrency and research company, is today announcing a multi-year partnership with the Toronto Futures Swaps Exchanges (tFOSE), a new, Toronto-based derivates exchange currently seeking regulatory approval in Canada. BNC will design, calculate, and implement a range of cryptocurrency indices for cash-settled options trading on tFOSE’s platform.
BNC’s indices will enable tFOSE clients in Canada and abroad to trade derivatives on a regulated platform with a number of cash-settled products, and thereby allow users to diversify their portfolios with access to an emerging asset class without having to hold cryptocurrency directly.
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BNC chief executive Fran Strajnar told Finance Magnates that tFOSE is “expected to receive regulatory approval in early- to mid-Q1” of 2021.
As for the specifics of the agreement, Strajnar said that “for tFOSE, we will be delivering 4x single asset crypto indices and a 1x basket crypto index by January,” and that “these benchmarks will power futures, options and swaps tradable products on tFOSE’s platform.”
How was the partnership formed?
Strajnar told Finance Magnates that the two companies began to open dialogue when tFOSE “was first dealing with the Canadian regulators.”
“They looked around the market and liked the infrastructure and benchmark solutions BNC built,” he said, adding that “we were quite excited to understand their products roadmap and vision,” and that the partnership is a “great fit.”
The partnership also fits well into BNC’s long-term roadmap: “BNC has for a long time been developing financial data infrastructure for the crypto asset class,” Strajnar told Finance Magnates.
“It’s akin to laying an undersea internet cable. It takes time, capital, expertise to build and roll out. As it’s being constructed, wholesale agreements are put into place, then eventually the products and revenues flow when everything is in place.”
Strajnar said that BNC is “just at that place now as a company, having completed the third generation of our back-end and signed many benchmark and index-related contracts in the past few months,” adding that “there is a lot more to be announced from BNC” in the coming months.
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The partnership represents the newest development in the Canadian cryptocurrency space, which has been slowly working toward building a more regulated and secure environment for traders since the QuadrigaCX incident of early 2019.
But Canada isn’t the only country in which the cryptocurrency ecosystem has been steadily working to improve: “the crypto ecosystem is maturing, and demand for regulated investment products from new institutional markets is growing,” Fran Strajnar said in a statement.
Strajanr believes that the hunger for higher-quality data that is inherent to building institutional tools is the reason that tFOSE chose BNC; after all, BNC has provided data solutions for NASDAQ, BTSE.com, TPICAP, Dow Jones Factiva, and–perhaps most famously–Amazon’s Alexa (if you Alexa for the price of any cryptocurrency, her answer comes from Brave New Coin’s data engine.)
“Our partnership with tFOSE furthers our role as a leader in market data, indices, and benchmarking for crypto assets,” he said. “We’ve dedicated our company to building products that bring institutional-grade services to this emerging asset class.”
Similarly , James Beattie, President and CEO at tFOSE, said that “Brave New Coin meets all of our needs, taking a unique approach to index design, methodology, and governance that will help tFOSE meet the specific, exacting needs of both our retail and institutional investors.”
Editor’s note: the title of this article previously described tFOSE as a ‘crypto futures’ exchange. This was incorrect. tFOSE is a fully regulated derivatives exchanges offering a wide range of index tracked futures, options and swaps products which includes crypto products.