SBI to Launch Cryptocurrency Derivatives Platform Built for Institutional Investors

Francisco Memoria
  • Japanese financial services giant SBI Holdings is set to launch a cryptocurrency derivatives exchange.
  • To do so it acquired a 12% stake in digital markets architect Clear Markets.

Japanese financial services giant SBI Holdings has reportedly invested in US digital marketplace architect Clear Markets in a bid to launch a cryptocurrency derivatives trading platform built for institutional investors.

According to Nikkei Asian Review, SBI Crypto Investments obtained a 12% stake in the North Carolina-based firm Clear Markets. While details of the deal weren’t disclosed, Nikkei claims the stake is worth about 1 billion yen ($9 million).

Per the publication, SBI Holdings’ goal in funding Clear Markets is to build a cryptocurrency derivatives exchanges that lets institutional investors trade various products tied to bitcoin and other cryptocurrencies. These products let institutions hedge other positions they might have in crypto markets, mitigating risks and reducing potential losses.

Per the Financial Times the platform will be a swaps trading venue. Mark Brickell, Clear Markets’ chief executive officer, stated:

As much as 50 per cent of cash trading in cryptocurrency has taken pace in Japan, so that is a nice place for us to start.

Mark Brickell

The lack of a proper derivatives trading platform has been cited as a reason institutional investors aren’t entering the cryptocurrency industry. While bitcoin futures are traded on two regulated exchanges – the Chicago Mercantile Exchange (CME) and the Chicago Board Options Exchanges (CBOE) – other products aren’t available.

Notably, SBI Holdings is seemingly fond of Ripple and its XRP token, as the head of the financial services giant, Yoshitaka Kitao, has in the past stated XRP is the only “battle-tested” cryptocurrency. Per his words, its scalable and will become the global standard for cryptocurrencies and fiat.

When SBI launched its SBI Virtual Currencies exchange, the first trading pair its crypto spot trading service VCTRADE supported paired the XRP token with the Japanese Yen (JPY), Japan’s fiat currency.

The company has led funding rounds in several large crypto exchanges, including bitFlyer and Kraken. Last month, it invested in Canada’s Lancium Technologies, a firm that providers wind power to cryptocurrency miners. Per Nikkei, the investment is set to help SBI lower its environmental burden as a BCH miner, and allow it to expand its operations.

Featured image from Shutterstock.