SBI Group to offer OTC derivatives trading in US after CFTC approval

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Japanese financial giant SBI Group has announced plans to expand its trading partners and services in the U.S. digital assets market. The megabank is eyeing an entry into digital assets derivatives trading in the U.S.

The bank stated this in a notice revealing that Clear Markets North America Inc., the U.S. subsidiary of Clear Markets (CM) in which it has a 12% stake, has gotten approval from the Commodity Futures Trading Commission (CFTC) to offer physically settled over-the-counter (OTC) digital assets derivatives.

The approval is the first of its kind given under the CFTC Swap Execution Facility (SEF) regulations, SBI noted. Clear Markets is the developer and operator of electronic trading platforms. SBI Alpha, the SBI Group’s digital assets market maker, has already conducted pilot transactions on its trading platform.

Meanwhile, Clear Markets is to kick off its OTC digital assets derivatives offering with USD/BTC Options trading for institutional investors with plans to expand the products offered in the future. SBI remarked that the approval is a big step for the digital assets industry in the U.S.

“In the United States, it takes a very long time to obtain approval for handling crypto-assets (or approval cannot be obtained). We believe that the approval of new crypto asset derivatives by the CFTC this time will be a big step toward the latter development,” a translated excerpt from the Japanese notice read.

With a vision to become a next-generation financial platform in the digital era, SBI group has invested in several other digital assets firms apart from Clear Markets. SBI Group owns stakes in Swiss digital assets bank Sygnum, as well as Japanese exchanges TaoTao and FXCoin.

CFTC seeking to expand its digital regulations powers

The CM approval is coming on the back of agitation by the CFTC to expand its digital assets oversight powers. The U.S. commodity futures regulator has asked lawmakers to provide regulations that will give it a more central role in regulating digital assets derivatives and digital assets that are classified as commodities.

The agitation has been paying off as two upcoming bills in the U.S. Senate will elevate the CFTC’s authority if passed. The first is the Responsible Financial Innovation Act proposed by Senators Cynthia Lummis (R-WY) and Kirsten Gillibrand (D-NY). More recently, Senator Debbie Stabenow (D-MI), and John Boozman (R-AR), proposed the Digital Commodities Consumer Protection Act of 2022.

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