• 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) announced that it will provide trading and clearing services for derivatives based on the Bitcoin index.
• GFO-X, a FCA regulated exchange, will offer cash-settled Bitcoin (BTC) index futures and options contracts with access to LCH’s clearing services.
UK Legalizes Bitcoin Futures Trading
The United Kingdom 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.
GFO-X Regulated Exchange
In a statement released Thursday, LCH, the clearinghouse arm of the London Stock Exchange Group, said that 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’s clearing services, the company announced in a press release. In the UK, GFO-X is the first exchange for digital asset derivatives that is both authorized and regulated by the Financial Conduct Authority (FCA).
Britain Aims To Become Crypto Hub
Earlier this year, Britain, which aspires to become a global center for crypto technology, opened a public consultation on future legislation for crypto assets, which are unregulated at present. Frank Soussan, chief of LCH Digital Asset Clear, claims that bitcoin index futures and options are a fast-growing asset class due to the rising number of institutional market participants seeking access within a regulated setting.
Clearinghouse Role
Trading agreements made on an exchange can be settled at a central clearinghouse. They have been favored by authorities since the 2008 financial crisis as a strategy to reduce the risk of investment banks doing business without proper risk management procedures or oversight. Centralized clearance helps ensure better transparency across markets so investors can trust their trades are securely cleared with minimal counterparty risk exposure..
Bitcoin Futures & Options Trading To Begin Soon
In the fourth quarter of this year, Bitcoin futures and options trading are anticipated to begin. The clearance service is now awaiting certification from French authorities. Arnab Sen CEO and cofounder of GFOX made following statement “Recent market events in Trading of Digital assets have highlighted need for safe regulated venue where large financial institutions can trade at scale while keeping their clients’ assets protected.”