SBI enters crypto derivatives market via Clear Markets investment

SBI Holdings, the Japanese financial services company, has revealed plans to enter the cryptocurrency derivatives market after buying a stake in US electronic trading platform developer Clear Markets.

SBI has acquired a 12% stake in the firm, which provides an over-the-counter derivatives electronic trading service in the US, UK and Japan. It intends to increase this to up to 20% in the future.

According to SBI’s financial report, Clear Markets plans to start up a cryptocurrency swap trading service for institutional investors, using the licences it already holds. These include a swap execution facility from the US Commodity Futures Trading Commission and derivatives brokerage licences in the UK and 32 countries in Europe.

Clear Markets will provide hedging for crypto swap transaction services, which SBI says is necessary for the handling of crypto and financial instruments that use crypto. “Increased use of cryptocurrencies and cryptocurrency derivatives and liquidity improvement are expected,” SBI says.

SBI has not revealed how much it is paying for the stake, but reports suggest it is worth around $9 million (£6.9 million).

The financial services giant has invested in around 20 cryptocurrency projects in the past year, including Lancium Technologies, which aims to mine crypto using wind power. In June, SBI launched Japan’s first bank-backed crypto exchange, called VCTRADE, via its subsidiary SBI Virtual Currencies.