The UK is the latest 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 issued Thursday, LCH, the clearinghouse 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 contracts 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 to be authorized and regulated by the Financial Conduct Authority (FCA).
Britain aims to become a Bitcoin hub
Earlier this year, Britain, which aspires to become a global crypto hub, launched a public consultation on future legislation for crypto assets, which are currently unregulated.
Frank Soussan, head of LCH Digital Asset Clear, says bitcoin index futures and options are a fast-growing asset class due to the increasing number of institutional market participants seeking access within a regulated environment.
“Offering centralized clearing for these cash-settled dollar-denominated crypto derivatives contracts on GFO-X is an important development for the market,” Soussan said.
In the fourth quarter of this year, Bitcoin futures and options trading 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 and regulated place where large financial institutions can operate on a large scale, while keeping their clients’ assets protected.”
The main role of clearing houses
Trade deals made on an exchange can be settled at a central clearing house. They have been favored by the authorities since the 2008 financial crisis as a strategy to reduce the risk of investment banks entering into separate bilateral transactions with other participants.
Rival CME Group already offers bitcoin futures and options, while the Chicago Board Options Exchange has 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 Deutsche Boerse’s Eurex platform.
As investor interest in cryptocurrencies grows, more and more mainstream 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 large financial institutions have entered the crypto market, including JP Morgan, Morgan Stanley, Goldman Sachs, and BlackRock.
Various Bitcoin futures products, mainly futures ETFs, have been introduced in various countries in recent years.
Following the lead of the United States in 2021, countries like Brazil, Argentina, and even Hong Kong made similar moves.
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