Gibraltar Plans to Introduce World's First Crypto Derivatives Clearing and Settlement Rules

The government of Gibraltar is planning to introduce what it claims would be the world’s first rules for the clearing and settlement of crypto derivatives. The aim is to create a regulatory framework that can improve market integrity and reduce key risks.

Working with the Gibraltar Financial Services Commission (GFSC) and crypto exchange Bullish (whose parent company is also the parent of CoinDesk), the government has built a framework over the past six months. It seels to tailor traditional financial clearing regulations to the virtual asset market.

The framework will enable virtual asset derivative contracts to be cleared and settled by a recognized clearing house, Bullish said on Tuesday.

Clearing houses ensure that trades are finalized, with buyers and sellers meeting their commitments in the process. Many virtual asset exchanges have been performing that function which, in the absence of regulatory oversight, can lead to failures in the process, Bullish added.

The proposed regime will allow the establishment of separate clearing houses with "improved transparency and capitalization," said Bullish.