FTX Forays into Forex Derivatives Trading, Lists New Perpetual Future

Going by a Monday announcement, crypto exchange FTX may have just delved into the world of foreign exchange (FOREX) derivatives trading. The move appears to be in line with the firm’s efforts to tap into the growing value of the US dollar.

FTX Dollar Spot Index

FTX has listed a new perpetual future that will be tied to a US dollar spot index, per the announcement. The new perpetual contract will be called FTX Dollar Spot Index. And it will track the performance of a group of four global currencies against the dollar. The four currencies are none other than the Euro, the Canadian dollar, the Japanese yen, and the British pound.

It is noteworthy that FTX’s decision comes at a time when the crypto market is experiencing difficulties. Interestingly, however, while crypto markets remain in depression, foreign exchange has recently kicked off. In fact, FOREX traders are currently enjoying a sustained amount of favorable volatility.

According to the head of FOREX and emerging-market macro trading at Bank of America, Carlos Fernandez-Aller, the increased activity will not be dwindling anytime soon. He said in part:

“It has been up in activity which has been very lucky for us.”

Bloomberg also confirms the increase in foreign exchange activity after noting a surge in Deutsche Bank’s FX Volatility Indicator.

Additionally, the US dollar itself is already nearing its all-time high while the pound sterling is also up. This follows a controversial economic program that was recently rolled out by UK Prime Minister Liz Truss. However, the Japanese yen and the euro are not doing so well at the moment.

FCM Proposal Still in View

Meanwhile, the new FTX derivatives listing follows a proposal that the exchange submitted to the US Commodity Futures Trading Commission (CFTC). The proposal, if approved, will see the exchange become a direct futures commission merchant (FCM). That is, FTX once cleared to be an FCM, will be a full derivative clearing organization. Essentially, this will make it possible for the firm to bypass third-party brokers and offer futures directly on its platform.