By Huw Jones
LONDON (Reuters) -London Stock Exchange Group has teamed up with Global Futures and Options (GFO-X) to offer Britain’s first regulated trading and clearing in bitcoin index futures and options derivatives, the companies said on Thursday.
Britain, which aims to become a global hub for crypto technology, launched a public consultation earlier this year on future rules for cryptoassets, which are currently unregulated.
GFO-X, which is licensed by the UK’s Financial Conduct Authority, is a start-up platform aimed at global institutional investors who want to trade digital asset derivatives.
LSEG’s Paris-based LCH SA clearing unit will introduce a new, segregated clearing service, DigitalAssetClear, for cash-settled dollar-denominated digital assets traded on GFO-X.
The new service is anticipated to start in the fourth quarter of this year, pending approval from French and European Union regulators.
“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,” GFO-X said in a statement.
Rival CME Group already offers bitcoin futures and options, while CBOE acquired a digital asset exchange, ErisX.
Deutsche Boerse’s Eurex is due to launch dollar and euro denominated futures on the FTSE bitcoin index next Monday.
GFO-X’s inclusion of a long-established mainstream clearing house is aimed at reassuring investors after collapses in the crypto sector, including FTX exchange.
“Recent market events in the trading of digital assets have highlighted the need for a safe, regulated venue where large financial institutions can trade at scale, while keeping their clients’ assets protected,” said Arnab Sen, chief executive and co-founder of GFO-X.
Frank Soussan, head of LCH DigitalAssetClear, said bitcoin index futures and options are a rapidly growing asset class, with growing interest among institutional investors.
“We look forward to working with GFO-X and market participants alike to build a liquid, regulated marketplace for these products, and contributing to its safe growth and development,” Soussan said.
LSEG owns data and analytics business Refinitiv, formerly a division of Thomson Reuters. Thomson Reuters holds a minority stake in LSEG, and LSEG pays Reuters for news.
(Reporting by Huw Jones; Editing by Mike Harrison and Susan Fenton)
