SBI Holdings To Build Crypto Derivatives Platform
Japanese financial services company SBI Holdings is acquiring a 12% stake in Clear Markets to broaden its crypto business portfolio.
The information was revealed in the company’s financial results declared July 31. In the future, SBI is planning to raise its stake to 20%.
SBI’s investment in Clear Markets is primarily intended to take forward its plan of creating a cryptocurrency derivatives trading platform focused on institutional investors.
The platform will facilitate large institutions to perform hassle free trading on the crypto derivatives market. Clear Markets, a US-based electronic trading platform creator and operator, presently offers OTC (over-the-counter) derivatives trading services in the UK, US and Japan.
Under the partnership, Clear Markets will facilitate hedging for crypto swap transaction services, which are “necessary for the handling of cryptocurrencies and financial instruments that use cryptocurrencies.” SBI Group, in its report, has mentioned that a rise in the use of cryptocurrencies and related derivative products will boost liquidity.”
There is no clear information regarding the investment made by SBI. However, Nikkei Asian Review reported the investment to be about $9 million.
Clear Markets, which holds a swap execution facility (SEF) license from the US CFTC (Commodity Futures Trading Commission), is planning to unveil a crypto swap trading facility. The company also runs a derivatives brokerage in the UK and 32 countries in Europe. Clear Markets, an affiliate of QUICK Corp., is a subsidiary of Nikkei Inc.
Notably, SBI has invested in more than 20 crypto related projects in the past one year. The banking and finance group recently launched a cryptocurrency exchange for public use. The exchange, named VCTRADE, offers only Bitcoin (BTC), Ripple (XRP) and Bitcoin Cash (BCH) on its platform.
Japan leads the cryptocurrency market in terms of adoption. Mark Brickell, CEO of Clear Markets said “as much as 50% of cash trading in cryptocurrency” happens in Japan. Considering the volatile nature of digital assets, the Japan Virtual Currency Exchange Association (JVCEA) has asked its member exchanges to implement restrictions on the trading activity of big clients in order to protect small investors.