The company noted that this model will allow investors to trade futures without posting complete collateral upfront. According to reports from Reuters in June, the current trading model requires investors to post full collateral for the relevant futures contract.
Cboe Digital plans to offer financially settled margined contracts initially. However, it also committed to offering physically settled products — meaning that the buyer can receive cryptocurrency rather than traditional assets — if regulatory approval is granted.
The company said that it will introduce margined Bitcoin and Ethereum on Jan. 11, 2024, and noted that it could introduce other products over the course of the year.
Cboe Digital additionally noted that, with the introduction of the new product, it would become the first U.S.-regulated crypto native combined exchange and clearinghouse to offer both spot and leveraged derivatives trading on one platform.
Several other companies in the crypto and traditional financial industries will offer support, including B2C2, BlockFills, CQG, Cumberland DRW, Jump Trading Group, Marex, StoneX Financial, Talos, tastytrade, Trading Technologies and Wedbush.
Cboe highly involved in crypto ETFs
Cboe Digital is part of Cboe Global Markets, which is active in numerous other efforts to bridge crypto and traditional investing. The company’s Cboe BZX Exchange is notably involved in proposed rule changes for several pending spot Bitcoin ETFs, including those from Invesco, VanEck, WisdomTree, Fidelity, and ARK Invest.
Cboe BZX Exchange is also involved in some Bitcoin futures ETFs, Ethereum futures ETFs, and leveraged crypto futures ETFs that are currently available.
However, Cboe isn’t the only major player in this field. Nasdaq is also involved in certain proposals — specifically spot Bitcoin ETFs from BlackRock and Valkyrie. NYSE Arca, meanwhile, is involved with Grayscale’s planned GBTC spot Bitcoin ETF.