Bitcoin exchange Globitex advised the public that its parent Globitex Holding (Latvia) group company NexPay UAB has been granted by the Bank of Lithuania, a regulatory authority in the European Union, with an Electronic Money Institution (EMI) which would permit them to carry out payment services and e-money issuance in the EU.
Globitex is co-founded by former Bitcoin Foundation Executive Director Jon Matonis. The possession of the EMI license will entitle Globitex to directly integrate with the Single Euro Payments Area (SEPA) euro payment system via the Bank of Lithuania. This will enable NexPay to instantly clear euro payments without the involvement of commercial banks. To have an IBAN account, the clients of Globitex must go through the same process of acquiring an account in banks. This is a pivotal step to improve accessibility.
The company believes that this regulatory development paves the way for the institutional grade Bitcoin exchange to trade using EUR fiat payments worldwide as well as to foster the legitimacy of the digital currency industry. It also speaks on behalf of the actions taken toward widespread adoption of Bitcoin as a unit of account for global trade without geographic, political or monetary restrictions.
Globitex envisions to allow producers to pay for exchange-listed products for Bitcoin and trading firms while speculators could limit risks in Bitcoin with derivatives trading.
The Managing Director of Globitex Liza Aizupiete recently engaged in a panel discussion on the future of Blockchain technology and digital currencies at e-com21 in Riga Latvia. Aizupiete announced that Globitex is planning to set new technological and legal virtual currency trading standards. She explained that it would ensure safe passage to the digital age.
As Bitcoin continues to offer perks for international settlement through its fast and economical cost compared to legacy money transfer services, liquidity and order-book depth are not yet capable of supporting large trades. Thus, Bitcoin does not yet pass the standard as a currency of international trade settlement across the world’s financial markets.
Globitex is eager to tackle this challenge by driving up Bitcoin trading volumes and facilitating the use of Bitcoin as across commodity markets and the spectrum of money. Hence, pricing financial instruments and commodities like crude oil, gold, and coffee in Bitcoin.
Matonis expressed his excitement with the evolution of cryptocurrency trading platforms that would provide futures contracts with a physical delivery component. He elaborated that the strong tie-in to spot markets, as well as contract limits and physical delivery related to provisioned commodities, will be the basis of the market price integrity.
Matonis bulleted some risks related to cash-settled Bitcoin futures contracts. He emphasized that the price index is easily gamed because of the absence of physical commodity (private keys) for the integrity of short positions. Smaller members are vulnerable to limit-up, limit-down insolvency. Maintenance margins could help in avoiding leverage during volatility.
Cash-settled Bitcoin futures contract is a forerunner to exchanges like Globitex who offers proper physical-settlement futures contract. In actuality, physical-settlement Bitcoin markets and decentralized crypto will be steadier according to Matonis. He added that since warehousing, the behavior of open-contract limits and maintenance-margin calculations had been varied under a digital assets class with a physical settlement.
To finance the scaling of exchange infrastructures into a commodities spot and derivatives exchange for Bitcoin, Globitex will launch a token sale on the Ethereum blockchain for its GBX utility token.
A video clip rundowns a sneak peek of time where Bitcoin is the primary medium of exchange for everything and allows low-cost payments for international trades. Trading of precious metals and commodities will happen in seconds, and additional trading options for farmers, manufacturing companies, metal miners, oil refineries, etc.