LCH SA will team up with the FCA-regulated GFO-X trading venue to create a centrally cleared, regulated trading environment.
The United Kingdom could see its first centrally cleared trading venue for digital asset derivatives due to a partnership between a London Stock Exchange Group (LSEG) business and trading startup Global Futures and Options (GFO-X). They intend to launch the service in the fourth quarter of this year.
According to an April 11 announcement, LCH SA, the Paris-based subsidiary of the LSEG clearinghouse, is set to provide clearing services for dollar-denominated, cash-settled Bitcoin index futures and options contracts traded on the GFO-X venue. The plan still requires regulatory approval.
GFO-X is regulated by the United Kingdom’s Financial Conduct Authority to operate a multilateral trading facility. GFO-X co-founder and CEO Arnab Sen described the company as “the UK’s first regulated and centrally cleared trading venue focused entirely on digital asset futures and options.”
LCH SA has created a new, segregated clearing service called LCH DigitalAssetClear. Frank Soussan, 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.”
Traditional financial institutions and other major corporations are increasingly moving into digital assets. In January, Samsung launched a Bitcoin exchange-traded fund on the Hong Kong Stock Exchange. The Tel Aviv Stock Exchange is seeking to expand its crypto trading. Meanwhile, a Boerse Stuttgart Digital subsidiary recently received approval from German regulators to offer crypto custody service. Nasdaq is expected to launch a crypto custody service in the first half of this year.