Bitcoin futures and options trading is coming to the London Stock Exchange
The UK is the latest addition to the list of countries that have legalized bitcoin futures trading in one form or another.
The London Stock Exchange Group (LSE) said on Thursday that it will offer trading and clearing services for derivatives based on the Bitcoin index.
In a statement released on Thursday, LCH, the clearinghouse arm of the London Stock Exchange Group, said it will offer clearing services for cash-settled bitcoin (BTC) index futures and options.
Cash-settled Bitcoin (BTC) index futures and options contracts traded on GFO-X will have access to LCH’s clearing services, the company announced in a press release.
In the UK, GFO-X is the first digital asset derivatives exchange to be both authorized and regulated by the Financial Conduct Authority (FCA).
UK aims to become Bitcoin Hub
Earlier this year, the UK, which wants to become a global center for crypto-technology, opened a public consultation on future legislation for crypto-assets, which are currently unregulated.
Frank Soussan, head of LCH Digital Asset Clear, claims that bitcoin index futures and options are a fast-growing asset class due to the growing number of institutional market participants seeking access within a regulated setting.
“Offering centralized clearing for these cash-settled dollar-denominated crypto derivative contracts on GFO-X is an important development for the market,” said Soussan.
In the fourth quarter of this year, trading of Bitcoin futures and options is expected to begin. The clearance service is now awaiting certification from the French authorities.
Arnab Sen, CEO and co-founder of GFO-X, made the following statement:
“Recent market events in digital asset trading have highlighted the need for a safe, regulated venue where large financial institutions can trade at scale, while keeping their clients’ assets protected.”
The main role of the clearinghouses
Trading agreements entered into on an exchange can be settled at a central settlement centre. They have been favored by authorities since the 2008 financial crisis as a strategy to reduce the risk of investment banks doing separate bilateral business with other participants.
Rival CME Group already offers bitcoin futures and options, while the Chicago Board Options Exchange acquired a digital asset exchange, ErisX.
On Monday, the FTSE Bitcoin Index will be available in futures contracts traded in US dollars and euros on the Eurex platform of Deutsche Boerse.
As investor interest in cryptocurrency increases, more and more conventional financial institutions are beginning to offer cryptocurrency trading and related services.
Total market cap of cryptocurrencies climb a bit and now at $1.24 billion on the daily chart at TradingView.com
Banking Giants Joining the Bitcoin Bandwagon
Many major financial institutions have entered the crypto market, including JP Morgan, Morgan Stanley, Goldman Sachs and BlackRock.
Several Bitcoin futures products, primarily futures ETFs, have been introduced in several countries over the past few years.
Following the United States’ lead in 2021, countries such as Brazil, Argentina and even Hong Kong made similar moves.
– Featured image from CoinNewsSpan
