Non-deliverable forwards are financial derivative contracts settled in cash based on the difference between a contract rate and a spot rate. In the context of digital assets, these are agreements to exchange a cryptocurrency at a future date at a predetermined rate, but without the actual transfer of the underlying digital asset. Instead, only the net difference between the contracted price and the prevailing market price at settlement is exchanged in fiat currency. This allows participants to hedge or speculate on cryptocurrency price movements without holding the actual digital assets.
Context
The state of non-deliverable forwards (NDFs) for cryptocurrencies is growing, particularly among institutional investors seeking synthetic exposure without direct asset custody. Key discussions involve the regulatory classification of these instruments and the liquidity of the underlying spot markets used for settlement. Future developments include expanding the range of cryptocurrencies available for NDFs and clearer regulatory guidelines that could further institutional adoption and market depth for these derivatives.
Integrating spot crypto trading into the FX desk provides institutional clients with a compliant, high-assurance gateway for direct digital asset exposure and risk management.
We use cookies to personalize content and marketing, and to analyze our traffic. This helps us maintain the quality of our free resources. manage your preferences below.
Detailed Cookie Preferences
This helps support our free resources through personalized marketing efforts and promotions.
Analytics cookies help us understand how visitors interact with our website, improving user experience and website performance.
Personalization cookies enable us to customize the content and features of our site based on your interactions, offering a more tailored experience.
