Cboe Digital Gets Margin Crypto Nod

Cboe Clear Digital says it has received the necessary approval from the Commodity Futures Trading Commission (CFTC) to expand its product offering to include margined futures contracts.

The initial product launch will include physically and financially settled Bitcoin and Ether contracts in the second half of 2023, and Cboe says it is the first US regulated crypto-native exchange and clearinghouse combination platform to offer leveraged derivatives products.

To date Cboe has offered trading and clearing of Bitcoin and Ether futures on a fully collateralised basis, which require customers to outlay the full amount of a futures contract upfront. The new margin model will require only a percentage of the total posted as collateral, enabling customers to trade futures in a less capital-intensive way. Trades will be executed and cleared through an approved set of member Futures Commission Merchants (FCMs) with Cboe Digital’s clearinghouse acting as the central counterparty.

“We are grateful to the CFTC for working with us as we continue to build out our vision for a transparent, US regulated crypto marketplace that welcomes intermediaries,” says John Palmer, president of Cboe Digital. “Derivatives are a time-tested and valuable tool that enable investors to gain market exposure and manage their risk.”