Bitcoin Futures And Options Trading Coming To London Stock Exchange
The UK is the newest addition to the list of countries that have legalized bitcoin futures trading in some form.
The London Stock Exchange Group (LSE) said on Thursday that it will provide trading and clearing services for derivatives based on the Bitcoin index.
In a statement released on Thursday, LCH, the clearing arm of the London Stock Exchange Group, said it would provide clearing services for cash-settled bitcoin (BTC) index futures and options.
Cash-settled Bitcoin (BTC) index futures and options traded on GFO-X will have access to LCH clearing services, the company announced in a press release.
In the UK, GFO-X is the first digital asset derivatives exchange authorized and regulated by the Financial Conduct Authority (FCA).
Great Britain aims to become Bitcoin’s hub
Earlier this year, Britain, which aspires to become a global center for cryptographic technology, opened a public consultation on future legislation for cryptographic assets, which are currently unregulated.
Frank Soussan, head of LCH Digital Asset Clear, says that bitcoin index futures and options are a rapidly growing asset class due to the growing number of institutional market participants seeking access within a regulated environment.
“Providing centralized clearing for these cash-settled dollar-denominated crypto derivative contracts on the GFO-X is an important development for the market,” said Soussan.
In the fourth quarter of this year, Bitcoin futures and options trading is expected to begin. The dispatch 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 secure and regulated venue where large financial institutions can trade at scale while keeping their clients’ assets protected.”
The main role of clearinghouses
Trade settlements made on an exchange may be settled at a central clearing house. They have been favored by authorities since the 2008 financial crisis as a strategy to reduce the risk of investment banks doing separate bilateral deals with other participants.
Rival CME Group already offers bitcoin futures and options, while the Chicago Board Options Exchange has acquired digital asset exchange ErisX.
On Monday, the FTSE Bitcoin Index will be available on futures contracts traded in US dollars and euros on Deutsche Boerse’s Eurex platform.
As investor interest in cryptocurrencies grows, more and more mainstream financial institutions are starting 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 cryptocurrency market, including JP Morgan, Morgan Stanley, Goldman Sachs and BlackRock.
Various Bitcoin futures products, most notably futures ETFs, have been introduced in several countries in recent years.
Following the example of the United States in 2021, countries like Brazil, Argentina and even Hong Kong made similar moves.
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