B3, the Brazilian Stock Exchange confirmed that it will launch its first official product for the cryptocurrency market, Bitcoin (BTC) futures trades. Andre Milanez (chief financial officer of the group) made the announcement on Monday during a conference phone call.
Milanez didn’t give much information about the product’s operation. Although it isn’t yet clear if B3 will enter into a partnership with Bitcoin Futures Trading or offer Bitcoin futures trading direct, the timeline for launching this product has been stated to be very short. He stated that bitcoin futures will be launched in the next three to six month.
Currently, Brazilian institutional and retail investors have access to 11 ETFs via B3 that offer exposure to cryptocurrencies. These include CRPT11 (Empiricus with Vitreo); the NFTS11 (Investo); QBTC11; QETH11; and QDFI11 all available from QR Assets. META11; HASH11; ETHE11; DEFI11; WEB311 all available from Hashdex. Brazil has more than 25 investment funds that have been approved by the Securities and Exchange Commission. They offer different levels of exposure to the cryptocurrency-assets market.
Jochen Mielke De Lima, director for information technology at B3, stated in January that several products would be launched by the Brazilian stock exchange with exposure to cryptocurrencies, including Bitcoin futures (ETH) and Ethereum futures (BTC).
The executive stated that the Brazilian stock exchange has been closely studying the cryptocurrency market since 2016.
According to the statement by B3, the only requirement was to resolve the question of whether negotiations would be conducted against the Brazilian real or the U.S. Dollar. Futures contracts require a reference index. If the team chooses Brazil’s currency, it will need to create a crypto-assets Index in reais. This index is not currently available.
A B3 representative also stated that it is looking at ways to provide data inputs to the country’s digital currency central bank, or CBDC.
B3 and Cryptocurrencies
Jochen Mielke De Lima says that B3 will offer services for ETH and BTC futures as well as a service to national cryptocurrency exchanges. It also plans to become a “centralizer” of custody operations and settlement operations.
“We have about 30 national cryptocurrency exchanges. We could provide a service that would facilitate and standardize their operations. It could be used to provide custody services or in the settlement process.
Mielke also said that the cryptocurrency market is similar to the regulated stock exchange in that it involves trading, issuing and settlement, as well as custody. According to Mielke, B3 could solve the common problems among exchanges.
He said, “We are trying to identify points of friction that can be helped resolve,” he added.
B3 also plans to launch other products that are based on blockchain and cryptocurrencies in 2022. There are also studies about a platform to tokenize assets, trade cryptocurrency, and custody cryptocurrency, among other things.
“Trading and Access to Liquidity Centers: This means mitigating the complexities in accessing a global, fragmented and 24-hour market. Digital Asset Custody: Provides reliable custody (hence the purpose of blockchain transactions). Capital efficiency gains: Thus, it wants the capital efficiency gains to be mitigated by the pre-funded nature operations. Crypto as a Service: Make it easier for clients explore the crypto market without high friction,” B3.
Reps from B3 said that they expect to launch a reinsurance platform in 2022. This partnership will be between IRB Brazil and Corda Blockchain R3.