Linklaters advises ISDA on New Standard Definitions for Digital Asset Derivatives

Linklaters has advised The International Swaps and Derivatives Association, Inc. (ISDA), acting as drafting counsel on the new standard documentation for digital asset derivatives.

The ISDA Digital Asset Derivatives Definitions are intended to bring greater clarity to this nascent asset class by creating an unambiguous contractual framework for digital asset derivatives under the umbrella of the ISDA Master Agreement and reducing credit and market risk by setting clear provisions for execution and settlement, among other things.

The definitions initially cover non-deliverable forwards and options in respect of Bitcoin and Ether but could be expanded in future to cover additional product types and underliers, such as digital securities or digital cash.

ISDA was advised by a cross-border Linklaters team, led by Douglas Donahue (New York) and Richard Hay (London), with support from Sophia Le Vesconte (Paris), Henry Wells (London), Jonathan Ching, Joshua Ashley Klayman, Chris Smith (all New York) and Megan Gosling (London).

Doug Donahue, Partner at Linklaters, said:

“Congratulations to ISDA on its publication of the ISDA Digital Asset Derivatives Definitions. We are very grateful to have had the opportunity to partner with ISDA to create these definitions, continuing our support for the important work ISDA does for our industry. The ISDA Digital Asset Derivatives Definitions are a big step forward for the industry in two major respects. First, they bring standardized approaches to some of the unique aspects of trading crypto derivatives. Second, they are drafted in a controlled language structure, which makes them more easily compatible with CDM and smart contracts and easier to read.”

The ISDA Digital Asset Derivatives Definitions are available on ISDA’s MyLibrary electronic documentation platform and can be accessed here. You can read ISDA’s press release on the New Standard Definitions for Digital Asset Derivatives here.