Bitnomial Clearinghouse LLC, which functions as an infrastructure-only clearing provider, has announced that the US Commodity Futures Trading Commission (CFTC) has granted the firm approval to clear fully collateralised swaps. 

Therefore, with this approval in place, Bitnomial, its parent company, which operates as a US-regulated digital asset derivatives exchange, has been permitted to start offering clearing services to other platforms and begin operating prediction markets.

In a recently released report, Bitnomial noted that its prediction market will primarily concentrate on the crypto industry and economic events. This is in addition to its current BTC and crypto derivatives products. The contracts will grant traders the chance to bet on outcomes such as macroeconomic data and the price levels of tokens. 

Bitnomial prepares itself to begin prediction markets after securing approval 

Following Bitnomial’s recent approval, sources close to the situation mentioned that the CFTC’s decision will significantly diversify the range of trading products that Bitnomial will provide. Currently, the Chicago-based firm offers perpetuals, futures, options contracts, and leveraged spot trading via its exchange and clearing divisions. 

Moreover, its clearinghouse supports margin and settlement based on cryptocurrency, granting approved products the opportunity to be margined and settled directly using digital assets.

Following these findings, the crypto community expressed its excitement over Bitnomial’s approval. This action prompted the president of Bitnomial, Michael Dunn, to comment on the topic of discussion. Dunn highlighted that this approval marks a recent accomplishment, further elaborating that it enables the firm to support both its exchange and external partners. This move establishes a clearing network that improves the overall prediction market ecosystem, he said.

Concerning reports that the Bitnomial Clearinghouse operates as an infrastructure-only clearing provider, sources clarified that the firm decided to undertake this function rather than rivalling retail businesses.

This strategy grants partners the green light to access its margin and settlement systems. The decision creates room for collateral conversion between US dollars and cryptocurrencies.

Meanwhile, analysts discovered that Bitnomial’s recent approval followed the green light to begin a US-based spot cryptocurrency trading platform regulated by CFTC. The platform enables clients to effectively purchase, sell and conduct trade of both leveraged and non-leveraged cryptocurrency products on a federally government-regulated exchange.

Prediction markets become increasingly popular in the crypto industry 

The CFTC’s recent decision on Bitnomial’s request to start prediction markets in the US demonstrates an increasing popularity among prediction markets this year. 

To support this claim, DefiLlama shared data indicating that the prediction market Kalshi has successfully achieved $5.27 billion in trading volume over the last month.  On the other hand, Polymarket, which is based on blockchain, recently achieved $2 billion at the same time.

This accomplishment followed Polymarket’s acquisition of approval from the CFTC in November to operate an intermediated trading platform. This enabled its users to access it via registered brokers due to US market regulations.

The approval was secured after the CFTC and the US Department of Justice discontinued an investigation in July. In this investigation, they examined whether Polymarket permitted its users based in the US to trade. The investigation involved an FBI search of founder Shayne Coplan’s house.

In the meantime, sources mentioned that Polymarket finalises contracts using the USDC stablecoin on the Polygon blockchain. It has also recently reported the formation of partnerships, including collaborations with UFC and Zuffa Boxing, as well as fantasy sports operator PrizePicks, in November.

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