ISDA: Publication of the Digital Asset Derivatives Definitions

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Authored by: Simon Deane and Crystal Choi

The International Swaps and Derivatives Association (“ISDA”) has released new standard documentation for the trading of digital asset derivatives, along with a whitepaper that tackles legal concerns raised by the recent bankruptcies of major crypto exchanges and market participants.

The main objective of the ISDA Digital Asset Derivatives Definitions is to bring greater clarity to this nascent asset class. It does this by creating an unambiguous contractual framework for digital asset derivatives under the umbrella of the ISDA Master Agreement, so as to reduce credit and market risk by setting clear provisions for execution and settlement.

The ISDA Digital Asset Derivatives Definitions initially cover non-deliverable forwards and options on Bitcoin and Ether, but there are plans to broaden the scope to cover other product types such as tokenized securities and other digital assets executed on distributed ledger technology.

The definitions are available here.

Key Contacts

Simon Deane

Consultant | Banking and Finance

Email or call +852 2825 9209