- The London Stock Exchange will soon offer clearing services for Bitcoin futures and options.
- The BTC index derivatives clearing will be made available through the group’s clearing subsidiary LCH.
- LCH will provide clearing for cash-settled BTC index derivatives on the UK GFO-X exchange.
The London Stock Exchange Group has announced plans to offer clearing for Bitcoin index futures and options. As the world’s eighth largest stock exchange, LSE Group will facilitate trading of BTC futures and options through its clearing house subsidiary LCH.
Bitcoin index derivatives on FCA regulated exchange
According to a press release of the LSE Group’s LCH, the clearing services for Bitcoin index derivatives will be provided through the Paris-based arm of the clearing subsidiary. A clearinghouse is a designated intermediary between a buyer and seller in a financial market. The clearing house validates and completes the transaction and ensures that both parties meet their contractual obligations.
LCH has reportedly signed a deal with UK digital asset exchange GFO-X to bring BTC futures and options trading to traders. Established in 2020, GFO-X is the UK’s first centrally cleared trading platform for digital asset derivatives. The exchange is authorized and regulated by the UK Financial Conduct Authority (FCA). The new company will operate as LCH DigitalAssetClear. The BTC options and futures traded on GFO-X will be cleared by the newly formed entity.
LCH stated that LCH DigitalClearHouse will operate a segregated clearing service for market participants clearing the BTC derivatives, which will include a fully segregated default fund. The new Bitcoin index derivative contracts are cash-settled through LCH DigitalAssetClear and are based on the GFO-X/Coin Metrics Bitcoin Reference Rate (GCBRR). GCBRR is a reference rate that complies with the Benchmark regulation of Bitcoin’s price in US dollars. The plan is subject to regulatory approval.
“Providing centralized clearing for these cash-settled, dollar-denominated crypto derivatives contracts on GFO-X is an important development for the market. The service is a powerful combination of GFO-X’s state-of-the-art technology and optimized contract specifications with LCH’s proven risk management capabilities.”
Frank Soussan, Head of LCH DigitalAssetClear
