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Singapore Exchange (SGX) plans to list BTC perpetual futures later this year, joining a growing number of traditional exchanges diving into the ‘crypto’ market.
SGX plans to list the futures in the second half of this year, a spokesperson told Bloomberg. They will only be accessible by professional investors and institutions, in line with the country’s financial regulations which bar retail investors from complex financial products to protect them from their outsized risk.
Perpetual futures are a subset of futures contracts that do not have an expiration date. This allows traders to hold their positions indefinitely, unlike with traditional futures. Without the expiration date, exchanges rely on a nuanced funding mechanism in which short traders pay a fee if the price rises and vice versa.
Being Singapore’s largest exchange and the second largest in the Association of Southeast Asian Nations (ASEAN), SGX hopes its market reputation will attract traders who have shied away from the loosely regulated digital asset market.
“In a space where confidence and credibility make all the difference, our innovative offering on a trusted, regulated platform will significantly expand institutional market access,” the company said in a statement to media outlets.
Perpetual futures are a popular product in the ‘crypto’ world and have been one of the core products on some of the largest ‘crypto’ exchanges. However, a vast group of deep-pocketed institutional investors still shied away from these products since the ‘crypto’ sector is still viewed as the Wild West. After all, perpetual futures were one of the main products of the defunct FTX exchange, which, at its peak, traded over $20 billion daily in these products.
Traditional exchanges are stepping in to capitalize on this new market, lending their reputation to these ‘crypto’ products, which routinely trade over $100 billion a day.
In Singapore, two other traditional platforms already offer BTC perpetual futures. Last year, EDX Global launched an exchange offering spot and perpetual futures in the city-state. The company, backed by Fidelity Digital Assets and Citadel Securities, partnered with Anchorage for custody, with traders only depositing their net obligations on their Anchorage accounts.
Months before EDX Global launched its platform, a similar offering from AsiaNext went live in Singapore and targeted the same market. At launch, the company, backed by Japan’s SBI (NASDAQ: SBHGF) and Switzerland’s SIX exchange group, described its platform as a “safe venue for exposure to digital assets” for institutional investors.
Tel Aviv Stock Exchange eyes DLT upgrade
Elsewhere, Israel’s sole public securities market, the Tel Aviv Stock Exchange (TASE), is targeting a system upgrade, with distributed ledger technology (DLT) and artificial intelligence (AI) among the technologies it’s eyeing.
TASE launched a public consultation on upgrading its clearing and settlement systems. It plans to develop and integrate advanced solutions built on “groundbreaking technologies” to improve access and enhance local competition.
Generative AI, DLT, and cloud computing are among the top technologies the bourse is exploring. It has enlisted the services of New York-based consultancy Oliver Wyman to review its business and systems and recommend the best course of action to revive the exchange.
In an accompanying document, the exchange revealed that it would use DLT to “increase efficiency, prepare for increased activity volumes and a larger variety of activities, all while providing clearing & settlement solutions at a high security level.”
TASE is no stranger to DLT. Three years ago, the exchange revealed it was working on tokenized government bonds to make them more accessible, especially to retail investors. It also announced plans to integrate DLT into its operations for efficiency, security and cost-effectiveness; CEO Ittai Ben-Zeev stated that TASE also intended to develop turnkey blockchain systems for smaller exchanges.
Beyond DLT, the exchange also plans to support digital assets, offer custody, clearing and settlement, tokenization, access to liquidity, staking, payments, and other interoperability solutions.
TASE joins a growing list of traditional exchanges integrating DLT, led by the Borse Stuttgart and the SIX Swiss Exchange. The latter established the world’s first regulated digital asset central securities depository: the SIX Digital Exchange (SDX).
Blockchain overhauls have not always gone according to plan. The Australian Securities Exchange’s (ASX) attempt to remodel its clearing and settlement system on the blockchain was a disaster, costing the exchange A$250 million ($157 million) by the time it was abandoned in 2022.
Watch: Blockchain is much more than digital assets
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