Singapore: Crypto Derivatives Set to Come Under Regulatory Oversight
Singapore’s central bank and financial regulator, the Monetary Authority of Singapore, has proposed bringing crypto derivatives trading under its purview.
According to a BNN Bloomberg report on Nov. 20, the MAS’ proposal would make the trading of derivatives based on underlying assets like Bitcoin (BTC) and Ether (ETH) subject to the city-state’s Securities and Futures Act.
Institutional investor interest sparked proposal
According to the MAS, plans to extend its remit to crypto derivatives have been spurred by interest from hedge funds and asset managers engaged in the sector.
Bitcoin derivatives trading globally currently sees $5–10 billion in daily traded volume, exceeding spot volume by 10 to 18 times, the report notes, citing data from Skew and BitcoinTradeVolume.
MAS has said its proposal will “allow approved exchanges in Singapore to meet the need of investors to manage their exposure to payment tokens while bringing the activity under regulatory oversight.”
As reported earlier this month, the Intercontinental Exchange’s (ICE) Bakkt platform is planning to expand its existing Bitcoin futures products to include a cash-settled option. Sources have claimed the new contract will be offered via ICE’s Singapore-based clearinghouse, ICE Clear Singapore, and traded on the ICE Futures Singapore exchange.
Bakkt, CME and beyond
Bakkt made industry history in September with its launch of a physically-settled Bitcoin monthly futures contract.
However, the platform’s underwhelming volumes in the first week following its launch were unfavorably compared to the fiat-settled BTC futures on CME, which first launched back in December 2017.
Bakkt reported 1,135 traded contracts (~$9.3 million) yesterday, Nov. 19, having reported an all-time high of 1,756 contracts on Nov. 8, according to tracking data compiled by Twitter account Bakkt Volume Bot.
Earlier this month, financial technology firm Tassat received the green light from United States regulators to secure the transfer of existing registration rights from an affiliated financial services firm, paving the way toward launching a compliant crypto derivatives exchange.
Yesterday, Tassat revealed a partnership with digital asset market maker Blockfills to launch an institutional Trade at Settlement product for spot Bitcoin (XBT/USD).