Bitnomial Exchange has become the first exchange regulated by the U.S. Commodity Futures Trading Commission to be allowed to accept digital assets as margin collateral, starting with bitcoin and ether.

The exchange can accept digital asset margin collateral from  institutional clients for leveraged perpetuals, futures and options trading. Retail traders will be able to use the service in late September 2025 through Botanical, Bitnomial’s new retail trading platform.

By reducing the need for US dollar reserves, traders can deploy their digital asset holdings more efficiently, maintaining exposure while accessing leverage and hedging opportunities. Michael Dunn, president of Bitnomial Exchange, told Markets Media that the firm is actively working on expanding margin collateral and trading support for additional crypto assets, which could include stablecoins.

Luke Hoersten, chief executive of Bitnomial, said in a statement: “Along with our digital asset settlements, this is a game-changer for traders who have been waiting for a compliant, efficient way to leverage their digital assets.”

Dunn continued that Bitnomial’s internal models show that not being to pay margin in crypto, and having to finance trades in US dollars, is “insanely expensive.” If traders use offshore venues, they have no recourse in the event of defaults and also have to post extra collateral to make sure they are not auto-liquidated, where the exchange automatically closes a position that does not meet its margin requirements.

“They can post less bitcoin on our platform, they are not going to be auto-liquidated and they will be a lot more capital efficient,” Dunn added.

He argued that Bitnomial has a first mover advantage, even when other exchanges get the same regulatory approval, due to its CFTC licences which include a  clearinghouse.

Chicago-based Bitnomial Exchange was designated as a contract market (DCM) by the US Commodity Futures Trading Commission to operate an exchange for margined and deliverable digital asset futures and options in 2020. The following year Bitnomial Exchange launched margined, physically-settled bitcoin futures.

In 2022 Bitnomial Clearing became a futures commission merchant for margined and deliverable digital asset futures and options. In 2023 year the firm became the first crypto-native exchange to be granted the full set of CFTC derivatives licenses when Bitnomial Clearinghouse was registered as a derivatives clearing organization (DCO) to operate a clearinghouse for margined and deliverable digital asset futures and options. The clearinghouse launched in January this year.

Dunn said Bitnomial pulled a lot of information, gave the CFTC lots of reports, including liquidity metrics, during the approval process for digital asset margin collateral.

“This is one of the most liquid spot commodity markets in the world,” he added. “If there is any scenario where either a clearing member needs to liquidate one of their customers, or we need to liquidate a clearing member, we can sell.”

Dunn said the CFTC asked very  good questions and had valid concerns, but realised that the clearinghouse did not have to be treated any differently to take digital assets as collateral as it operates with the same structure and same SPAN risk methodology as used in traditional finance. He added: “We are even being a bit more conservative than the math tells us to be.”

Clearing members can pay bitcoin or ether onchain to cover their margin requirements. This process has not been automated using smart contracts, as Dunn does not believe this would meet regulatory requirements.

“I think that the regulators would have a hard time with the use of smart contracts  because they can be backdoored,” he added. “There are a lot of other risks associated with them that I think would need more scrutiny.”

Perpetual futures competition

The launch of Bitnomial Clearinghouse allowed the exchange to support the launch of the first U.S. perpetual futures contract in April this year.

In contrast to traditional futures contracts, which have a fixed expiration date and settlement price, perpetual futures have no expiry and are constantly adjusted by a mechanism called the funding rate, which helps align the futures price with the spot price of the underlying. They account for approximately 90% of global crypto derivatives trading volumes.

Dunn said in a blog that perpetual futures represent the convergence between the global crypto perpetual futures market (over $100 trillion annually) and the U.S. futures and options markets (over $1.2 quadrillion annually). In April this year Bitnomial Exchange announced the self-certification of the first perpetual futures contracts ever listed on a U.S. exchange.

“With perpetual contracts now accessible under U.S. jurisdiction, the model may be extended to crypto, equities, rates, commodities, and FX,” he added.

Bitnomial’s perpetuals use an 8-hour funding interval, aligning with global trading sessions. The 25-year term minimizes roll activity, allowing for continuous exposure. Trading began with the launch of BTC/USD perpetual futures, available initially to institutional participants.

Since then, other exchanges have also launched perpetual futures. In Europe LMAX Group, the cross-asset marketplace for FX and digital assets, launched perpetual futures on 17 September 2025. The firm said in a statement that perpetual futures are entering a new phase of legitimacy and scale as regulatory clarity emerges, with trading volumes totalling $60 trillion last year.

LMAX has initially launched the two most dominant pairs, BTCUSD and ETHUSD, with more pairs to be added. All contracts are settled in US dollars.

David Mercer, chief executive of LMAX Group, said in a statement: “This launch enables our clients to confidently participate in digital asset derivatives and capitalise on crypto market momentum through the same trusted, regulated institutional trading infrastructure that handles over $40 billion average daily spot FX and digital assets flow.”

On 9 September 2025 Cboe Global Markets said in a statement that it plans to launch Cboe Continuous bitcoin and ether futures on 10 November 2025, pending regulatory review. They will have a 10-year expiration, reducing the need to roll positions over time and simplifying position management and will be cash-settled.

The new contracts will be trade on Cboe Futures Exchange and cleared through Cboe Clear U.S., a CFTC-regulated derivatives clearing organization,

Catherine Clay, global head of derivatives at Cboe, said in a statement: “We expect Continuous futures to appeal to not only institutional market participants and existing CFE customers, but also to a growing segment of retail traders seeking access to crypto derivatives.”

Since 21 July this year U.S. customers have been able to trade  CFTC-regulated nano bitcoin and nano ether perpetual futures on Coinbase Financial Markets. Perpetual futures on Coinbase, the publicly listed crypto exchange, are long-dated with expiration dates of five years and offer up to 10x leverage.

EDXM International also launched a perpetual futures exchange in Singapore. On 23 July 2025 EDXM International’s new perpetual futures exchange  went live for institutional traders to trade contracts across 44 trading pairs, including bitcoin, ethereum, solana and XRP.

Dunn believes Bitnomial has the correct suite of products.

“We just need to bring in the correct participants to get that flywheel going,” he added. “This is just the beginning and the market is going to explode exponentially.”