Nomura Offers its first Bitcoin OTC derivatives to clients in Asia

Posted by  Fintra , updated 2023-06-15

Nomura Offers its first Bitcoin OTC derivatives to clients in Asia

Nomura Begins Trading Crypto Derivatives, Joining Rivals Goldman and JPMorgan

In recent news, Nomura Holdings Inc., a Japanese global financial services group, announced it has taken a new step in its journey by moving on from being a traditional financial institution to entering the cryptocurrency industry, even as markets are in turmoil. Nomura has begun offering over-the-counter cryptocurrency derivatives with Bitcoin (BTC) non-deliverable forwards and non-deliverable options to clients in Asia out of Singapore. With this move, the firm has joined its rivals, Goldman Sachs (GS) and JPMorgan (JPM), by giving clients a way to access the crypto market.

Nomura Holdings Inc. has an integrated network spanning nearly 30 countries and regions. By connecting markets, East & West, along with its broker-dealer, banking and other financial services subsidiaries, the firm serves the needs of individuals, institutions, corporates and governments through its three business divisions: Wholesale ( Investment Banking and Global Markets), Retail, and Investment Management. This firm is one of the principal members of the Nomura Group. Nomura has launched the new firm intending to assist institutional clients diversify into cryptocurrency, decentralised finance, and Non-Fungible Tokens (NFTs), despite the recent run of volatility in the crypto markets, which raised essential questions over its safety for investors. As per the company’s plan, some claim the firm will combine several digital asset services under one roof wholly-owned subsidiary, and it'll contain around 100 staff by the end of 2024.

                            Nomura offers its first bitcoin OTC derivatives

As mentioned above, a few weeks ago, on Chicago-based futures exchange CME by DRW’s crypto-trading arm Cumberland, Nomura successfully executed its first Bitcoin futures and options trades. It's said the firm's unveiling plans coincide with a spectacular crash in the value of some of the most prominent cryptocurrencies, leading to some concerns about the entire crypto market. Though the new company established by Nomura will be headed by its current executives, it will also hire extensively from outside, enabling the Japanese brokerage to compete with the other major global banks that are already offering institutional clients services and products linked to Bitcoin, Stable Coins, and other digital assets. Now, Nomura has joined Goldman Sachs, Citigroup, Bank of New York Mellon, and other global financial institutions, which have all become active in the cryptocurrency market in recent years. Do note that CME Group is termed the world's biggest financial derivatives exchange, and Cumberland DRW is known to be a specialized crypto asset trading company.

In a statement attached to a tweet, Rig Karkhanis, Nomura’s head of global markets for Asia ex-Japan said that options enable various investors to trade volatility directly and protect against downside risks in the crypto market. Later on, in an interview with Bloomberg, Tim Albers who's Nomura’s head of forex structuring in Asia ex-Japan said that though there has been significant volatility recently, once settled, valuations will become more attractive for institutional clients. He also claimed that they're excited to get this started because the launch signifies the start of a journey into the space for the global markets business. 

Crypto Expansion

Nomura is gaining more resources within its Singapore-based foreign exchange team along with its wholesale digital office for expanding in the field of crypto in its global markets division. In 2018, the digital office was formed to identify and execute new technology-led revenue opportunities like digital assets, artificial intelligence, and support its e-trading platforms. Without going much into details, Albers revealed that over time the brokerage plans to expand its trading capabilities across other global markets.

Nomura’s expansion has occurred as crypto firms are facing growing scrutiny from policymakers. Moreover, cryptocurrencies along with other risky assets are even under pressure after the Federal Reserve. Various other central banks have raised interest rates to combat inflation, and this has created an unfavourable environment for such assets. Hence, Albers added that over time they expect the sector to mature and become more regulated, making it more attractive for institutional investors. As a result, as time passes by volatility should reduce.