Business

The Brazilian exchange will launch Bitcoin and Ethereum futures

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B3, the Brazilian exchange, confirmed that it intends to launch its first official product on the cryptocurrency market within 6 months – trading Bitcoin futures. The group’s chief financial officer, André Milanez, made the announcement during a conference call on Monday.

Milanez didn’t provide many details about how the product will work. It is not yet known whether B3 will partner up or offer Bitcoin futures trading directly, but the timeframe for the launch of this product has been stated as relatively short. “We plan to launch bitcoin futures in the next three to six months,” he said.

Currently, institutional and retail investors in Brazil can trade 11 ETFs with cryptocurrency exposure through B3, including Empiricus’ CRPT11 with Vitreo; Investo’s NFTS11; QBTC11, QETH11 and QDFI11 all from QR Assets and META11, HASH11, BITH11, ETHE11, DEFI11, WEB311 all from Hashdex. Additionally, there are more than 25 investment funds authorized by the Securities and Exchange Commission (CVM) in Brazil that offer different types of exposure to the crypto-asset market.

Back in January, Jochen Mielke de Lima, director of information technology at B3, announced that the Brazilian exchange would launch several products with exposure to cryptocurrencies in 2022, including Bitcoin futures and Ethereum futures

At the time, the executive stressed that the Brazilian exchange had been scrutinizing the cryptocurrency market from a technological point of view since 2016.

According to the statement, B3 only had to clarify the question of whether the negotiations would be conducted against the US dollar or against the Brazilian real. Futures contracts require a reference index. So if the team decides to use Brazil’s native currency, a crypto asset index needs to be built in reais – something that doesn’t exist today.

The B3 representative also said that he is looking into ways to provide data inputs for the country’s central bank digital currency, or CBDC.

B3 and cryptocurrencies

Besides BTC and ETH futures, B3 also intends to offer services for national cryptocurrency exchanges and to be a kind of “centralizer” of custody and settlement operations, according to Jochen Mielke de Lima:

“We have around 30 national crypto exchanges apart from the international ones operating here. We could offer a service to facilitate and standardize their operations. I believe there is something to explore in the provision of custody services and the settlement process.”

Mielke also explained that the cryptocurrency market is very similar to the regulated stock market in that it includes issuance, trading, settlement and custody. He therefore stated that B3 could help solve common problems between exchanges.

“We identify friction points that we can help address, e.g. B. by helping our customers to offer the best access to their end customers,” he said.

In addition, B3 plans to launch other cryptocurrency and blockchain-based products in 2022. These include studies on an asset tokenization platform, cryptocurrency trading and cryptocurrency custody, among others.

“Trading and Access to Liquidity Centers: This means reducing the complexity of accessing a fragmented, global and 24/7 market; Custody of digital assets: providing reliable custody (hence the purpose of blockchain transactions); Over-the-counter facilitation: in this way, it aims to provide more security and efficiency in the movement and DVP of digital assets; Capital Efficiency Gains: Therefore, it wants to tone down the pre-funded nature of operations and crypto as a service: make it easier for customers to explore the crypto market with low friction,” B3 pointed out.

For 2022, B3 officials said they plan to officially launch a reinsurance platform. This will work on the Corda blockchain R3 and is a partnership between the exchange and IRB Brazil.