As the cryptocurrency industry continues to expand and institutions begin to show increased interest in digital assets such as Bitcoin (BTC), the management of the London Stock Exchange Group (LSEG) has decided to introduce Bitcoin futures and options into its offering.
Indeed, the LSEG has joined forces with the institutional-grade digital trading venue focused on cryptocurrency derivatives, Global Futures and Options (GFO-X), to offer Britain’s first regulated trading and clearing in Bitcoin index futures and options derivatives, as per the press release published on April 13.
According to the statement:
“GFO-X is taking the first steps to extracting efficiencies from new technologies within a traditional market structure, with the goal over time of delivering 24/7 trading to global regulated digital asset markets.”
Trust in unregulated environment
Considering that there is still no official regulation regarding the crypto market in the United Kingdom, the LCEG’s partnership with GFO-X, licensed by the UK’s Financial Conduct Authority (FCA), seeks to add trust to the digital asset derivatives ecosystem, bringing cryptos one step closer to mainstream finance.
As part of the project, LSEG’s Paris-based LCH SA clearing unit will introduce DigitalAssetClear, a new, segregated clearing service for cash-settled Bitcoin index derivatives traded on GFO-X. This service will launch in the fourth quarter of 2023 after the completion of LCH SA regulatory approvals.
Commenting on the development, Frank Soussan, the Head of LCH DigitalAssetClear, said:
“Bitcoin index futures and options are a rapidly growing asset class, with increasing interest among institutional market participants looking for access within a regulated environment they are familiar with. The service is a powerful combination of GFO-X’s high-performance technology and optimized contract specifications with LCH’s proven risk management capabilities.”
In February, the British government launched a public consultation on the future financial services regulatory regime for cryptocurrencies, as well as the risks and opportunities they present, demonstrating its commitment to turning the UK into a global crypto hub. The consultation will close on April 30, 2023.