ISDA Publishes New Standard Definitions For Digital Assets Derivatives

• Published date: 02 February 2023
• Subject Matter: Finance and Banking, Technology, Financial Services, Fin Tech
• Law Firm: Appleby
• Author: Mr Dean Bennett and Peter Colegate

In an important and welcomed development in the digital asset space, the International Swaps and Derivatives Association ('ISDA') has published new standard definitions for digital asset derivatives. Until now, there has been an absence of standardisation in the digital assets derivatives market with transactions often documented using highly bespoke agreements, including adapted ISDA-based documentation. However the spate of recent high profile insolvencies in the crypto market has highlighted the need for a move towards a standardised, robust and transparent set of trading documentation to support the further development and growth of this asset class. The introduction of the ISDA Digital Asset Derivatives Definitions (the 'Digital Asset Definitions') lay the foundations for this move.

The Digital Asset Definitions are designed for use by participants in privately negotiated transactions to document non-deliverable digital asset forwards and options referencing Bitcoin (BTC) or Ether (ETH) which are governed by the ISDA Master Agreement. Whilst initially covering non-deliverable forwards and options on Bitcoin and Ether, the Digital Asset Definitions have been drafted with future expansion to cover other derivative...