Institutional cryptocurrency exchange LMAX has announced a partnership with Swiss financial services group SIX to launch cash-settled, centrally cleared crypto-asset futures.
With the increasing institutional adoption of crypto trading, LMAX Group CEO David Mercer reveals that the company will complete its offering by adding digital asset futures to its portfolio through the latest partnership.
LMAX-SIX’s New Crypto Product Offering
Based on regulatory approval, LMAX said the launch is expected in Q3 2022. As per the official press release, the product will initially include centrally cleared USD settled Bitcoin and Ethereum futures. It will trade for 23 hours, five days a week. However, the fintech firm plans to eventually extend the roll-out to 24/7 trading.
“The partnership, which leverages the expertise of two leading market players, is set to deliver a superior crypto offering and is expected to receive immediate uptake from existing LMAX Group clients as the digital asset ecosystem continues to institutionalize and demand robust trading infrastructure grows.”
According to Mercer, LMAX’s institutional client base, which includes 35 top-tier banks that are already trading with the company, will benefit from the strength of the exchange trading technology, in addition to the “secure clearing connectivity of SIX.”
The exec also said the partnership will help bridge the gap in facilitating round-the-clock crypto futures trading seven days/week while catering to the requirement of a rapidly growing number of institutional participants in the ecosystem.
While noting that the crypto futures market is three times bigger than the spot, Mercer added that the key is to offer access to deep institutional liquidity. It comes when the market-wide push into the derivatives sector has noted a significant increase.
Following the partnership, Javier Hernani, Head Securities Services of SIX, commented,
“This is a major milestone for SIX from several perspectives. We are making substantial progress according to our digital asset clearing strategy and are expanding our portfolio of cleared asset classes. We are excited to partner with LMAX Group and be part of this ground-breaking initiative.”
Heading for Derivatives Division
The latest development comes as several cryptocurrency platforms were heading towards derivatives expansion. Last year, FTX US, the United States division of global cryptocurrency exchange FTX.com, also revealed eyeing to expand its product offerings to include crypto derivatives.
Its initial steps included the acquisition of Ledger Holdings, the parent company of the regulated crypto derivative platform, LedgerX, in October last year. It was later rebranded to FTX US Derivatives.
More recently, Coinbase revealed its plans about bringing a well-regulated derivatives market after announcing the acquisition of FairX, a CFTC-regulated derivatives exchange. Coinbase further stated that it aims to offer such services to all its customers in the US by leveraging FairXFairX’sastructure.