The London Stock Exchange Group (LSEG) has decided to expand its services by including Bitcoin futures and options as the popularity of cryptocurrencies grows among institutions.
This move has been made in partnership with Global Futures and Options (GFO-X), a cryptocurrency derivatives trading platform, to provide Britain’s first regulated trading and clearing in Bitcoin index futures and options derivatives.
The new, segregated clearing service for cash-settled Bitcoin index derivatives, called DigitalAssetClear, will be launched in Q4 of 2023, pending regulatory approvals.
This is a significant step in bringing cryptos closer to mainstream finance, especially as there is currently no official regulation in the UK regarding the crypto market.
The consultation seeks to assess the future financial services regulatory regime for cryptocurrencies and their present risks and opportunities.
The LSEG’s partnership with GFO-X, licensed by the UK’s Financial Conduct Authority (FCA), aims to add trust to the digital asset derivatives ecosystem.
By combining GFO-X’s high-performance technology and optimized contract specifications with LCH’s proven risk management capabilities, the service is expected to cater to institutional market participants seeking access to a regulated environment they are familiar with.
According to Frank Soussan, the Head of LCH DigitalAssetClear, Bitcoin index futures and options are a quickly expanding asset class that is garnering more interest from institutional market participants seeking access within a regulated environment.
This move by LSEG comes at a time when the British government is demonstrating its commitment to turning the UK into a global crypto hub, as demonstrated by the public consultation launched in February 2023.