The London Stock Exchange Group’s clearing house has announced that it will now offset bitcoin index futures and options. This announcement was made on April 13.
LCH Commits to Crypto
In a statement released on Thursday, the LCH (London Stock Exchange Clearing House) announced that it would offer its clearing services for futures and options on the BTC index. This service will be available for contracts and options settled in cash.
LCH has entered into a partnership with GFO-X, a UK-regulated digital asset exchange. This partnership should be seen as a commitment to crypto according to LCH.
How will this service work?
LCH will step in at the end of the process through its separate LCH DigitalAssetClear service. He is in charge of finalize transactions made on GFO-X.
A clearing house is a centralized location where it is possible to finalize agreed transactions on an exchange. This place makes it possible to reduce the risks of failure of the bilateral agreements between the actors.
It is prized by institutions such as investment banks. Clearinghouses have been receiving more and more institutional players since the 2008 financial crisis.
If this partnership has been established, it is simply because ” bitcoin index futures and options are a rapidly growing asset class according to the head of LCH DigitalAssetClear, Franck Soussan.
He says that institutional market players are interested in this asset class but are looking for a regulated framework that suits them.
The London clearinghouse is not the only one interested in cryptos since the one based in Brussels, Euroclear is preparing for the launch of a bond settlement platform based on crypto-like distributed ledger technology.
Furthermore, the Stuttgart Stock Exchange also burst into the crypto universe in March. German regulator BaFin granted it a crypto custody license.