Brazilian Stock Exchange B3, set to launch Bitcoin and Ethereum futures

B3, the Brazilian Stock Exchange, has revealed that it plans to offer its first official cryptocurrency product, Bitcoin (BTC) futures trading, within the next six months.
Brazilian Stock Exchange B3, set to launch Bitcoin and Ethereum futures
Brazilian Stock Exchange B3, set to launch Bitcoin and Ethereum futures

Milanez did not go into great depth about how the product will function. It is unclear whether B3 will negotiate a partnership or provide Bitcoin futures trading directly, but the company has claimed that the introduction of this product will be quite quick. “In the next three to six months, we plan to offer bitcoin futures,” he stated.

Institutional and individual investors in Brazil can currently trade 11 ETFs with exposure to cryptocurrencies through B3, including CRPT11 from Empiricus with Vitreo; the NFTS11 of Investo; QBTC11, QETH11 and QDFI11 all from QR Assets and META11, HASH11, BITH11, ETHE11, DEFI11, WEB311 all from Hashdex.

Furthermore, the Securities and Exchange Commission (CVM) has approved over 25 investment funds in Brazil that provide various sorts of exposure to the crypto-assets market.

B3’s head of information technology, Jochen Mielke de Lima, indicated in January that the Brazilian stock exchange would offer numerous cryptocurrencies-related products in 2022, including Bitcoin and Ethereum (ETH) futures.

The CEO stated at the time that the Brazilian stock exchange had been studying the cryptocurrency industry from a technology standpoint since 2016.

According to the statement, B3 merely needed to decide whether the discussions would be conducted in US dollars or Brazilian reals.

Futures contracts require a reference index, so if the team opts for the Brazilian currency, a crypto-assets index in reais will be required – something that currently does not exist.

The B3 representative also stated that the company is looking at ways to offer data for the country’s central bank digital currency, or CBDC.

B3’s crypto move

B3 plans to offer services to national cryptocurrency exchanges and act as a “centralizer” of custody and settlement activities, in addition to BTC and ETH futures, according to Jochen Mielke de Lima:

“We have around 30 national crypto exchanges, apart from the international ones that operate here. We could offer a service to facilitate and standardize their operations. I believe it has something to explore in providing custody services and in the settlement process.”

The cryptocurrency market, according to Mielke, is quite similar to the regulated stock market in that it involves issuing, trading, settlement, and custody. As a result, he suggested that B3 could assist in the resolution of common issues across exchanges.

“We’re identifying spots of friction that we can help resolve,” he added. “For example, we’re assisting our customers in providing the best access to their end customers.”

B3 also wants to introduce new cryptocurrencies and blockchain-based products in 2022. There are studies on an asset tokenization platform, cryptocurrency trading, and cryptocurrency custody among them.

“Trading and liquidity center access: this entails reducing the complexity of gaining access to a fragmented, global, and round-the-clock market; Digital Asset Custody: ensuring secure custody of digital assets (therefore the aim of blockchain transactions); Over-the-counter facilitation: it aims to improve the security and efficiency of digital asset movement and DVP; capital efficiency gains: it aims to reduce the pre-funded nature of operations; and Crypto as a service: it aims to make it easier for clients to explore the crypto market with low friction “B3 highlighted.

B3 representatives predicted the official introduction of a reinsurance platform in 2022. This is a collaboration between the exchange and IRB Brazil that will use the Corda blockchain R3.