Bitnomial Launches Digital Asset Clearinghouse, BNCH

Bitnomial has announced the launch of its new clearinghouse, Bitnomial Clearinghouse, LLC (BNCH), scheduled to begin operations on January 30, 2025.

BNCH is registered with the Commodity Futures Trading Commission (CFTC) as a derivatives clearing organization. The clearinghouse is set to be the first in the United States to clear both physically settled and cash-settled digital asset derivatives contracts.

The $100 billion daily global crypto derivatives market has seen 95% of trading volume taking place on offshore platforms. With BNCH, Bitnomial aims to provide a fully regulated environment for trading and clearing digital asset derivatives, addressing long-standing concerns about transparency, security, and compliance in the industry.

BNCH to clear physically settled Bitcoin futures and options, Hashrate futures

The clearinghouse will initially offer clearing services for Bitnomial Exchange’s core products, including physically settled Bitcoin futures and options, as well as Hashrate futures. This suite of offerings reflects Bitnomial’s focus on addressing the specific needs of institutional traders, miners, and lenders who often face high costs and operational inefficiencies in the current market structure.

One key feature of BNCH is its ability to accept digital assets like Bitcoin, Ethereum, and stablecoins as collateral for margin trading. This innovation is intended to streamline operations for participants while reducing the reliance on traditional fiat systems. In addition, the clearinghouse will implement real-time risk management and margin calculations, enhancing accuracy and efficiency in managing market risks.

Bitnomial has also announced several partnerships with clearing members, including Marex Capital Markets Inc. and R.J. O’Brien & Associates, LLC. These collaborations will support the smooth transition of trading activities to the new clearinghouse.

“How derivatives are traded, cleared, and settled within a U.S.-regulated framework”

Luke Hoersten, CEO of Bitnomial, said: “While our exchange and brokerage businesses have been critical in building our foundation, the launch of the clearinghouse represents the culmination of our vision. For the first time, we will provide a fully operational, end-to-end ecosystem that redefines how derivatives are traded, cleared, and settled within a U.S.-regulated framework, upgraded to digital asset infrastructure.”

Michael Dunn, president of Bitnomial Exchange, added: “The motivation for getting approval and launching a new clearinghouse was driven by necessity. Traditional clearing infrastructure has not met the evolving needs of the digital asset market. Those looking to effectively hedge their digital asset portfolio and liquidity providers currently face high costs because spot positions are not recognized in legacy clearing systems. Our clearinghouse will eliminate these inefficiencies by accepting digital asset collateral to margin futures and options trading,” he explained.

Bitnomial launched perpetual futures platform Botanical

The launch of BNCH is accompanied by several upgrades to Bitnomial’s overall ecosystem. These include lower margin rates for industrial participants, portfolio margining for enhanced capital efficiency, and a professional trading platform for perpetual futures called Botanical. These features are designed to reduce barriers for market participants and encourage broader adoption of regulated digital asset trading in the United States.

With BNCH, Bitnomial seeks to redefine the landscape of crypto derivatives trading by aligning cutting-edge technology with a robust regulatory framework. As the clearinghouse begins operations, it is poised to become a critical infrastructure piece in the maturing digital asset market, offering market participants a secure and efficient platform to trade, clear, and manage their positions.