Central counterparty clearing is a critical post-trade function that manages risk, enables margining, and compresses exposures between trade execution and final settlement.

Digital asset markets evolved on a bilateral model which has a high impact on counterparty risk management and exposure. Currently, every market participant must assess and manage the creditworthiness of each counterparty it trades with, leading to inefficiencies and risks in the market such as:

• Bilateral credit exposure

  Direct counterparty failures can cause cascading losses

• Capital inefficiency

  Margins are fragmented and capital remains tied up

• Limited market access

  Credit concerns restrict trading relationships

• Systemic risk

  No central risk management or default procedures

Whether trading traditional or digital assets, markets depend on counterparty trust to operate and grow, but the complexity of global modern markets creates a high operational burden on firms to manage risk individually across every one of their counterparties.

In traditional markets, central counterparties (CCPs) are embedded in the secure, financially resilient financial market infrastructure that reduce systemic risk and eliminate the inefficiencies of bilateral trading.

ClearToken is addressing this market need through our clearing house/CCP, with CT Clear.

CT Clear: The Future of Risk Management for Digital Assets

Launching 2026 (subject to regulatory authorisation)

By leveraging established financial market infrastructure principles through our digital asset clearing house/CCP, institutions will be able to trade digital assets with confidence, knowing that their transactions are backed by a resilient and regulated clearing framework.

ClearToken CCP will become the legal counterparty to both sides of every trade sent to CT Clear through novation. As the buyer to every seller and the seller to every buyer, ClearToken will guarantee trade completion even if counterparties default. This eliminates bilateral credit risk entirely while enabling portfolio margining and cross-product netting in real-time.

Central counterparty clearing provides a range of benefits to financial markets, and CT Clear will enable institutional and digital market participants to actively take advantage of:

• Counterparty protection

  We guarantee every trade we clear, eliminating bilateral risk

• Capital efficiency

  Portfolio margining unlocks trapped capital

• Expanded market access

  Trade with any participant, no credit barriers

• Standardised risk management

  Transparent margin models and default procedures

• Default containment

  Structured processes and funds maintain market stability

• Operational simplicity

  Single onboarding, seamless post-trade processes

CT Clear centralises risk across participants, venues, and trading flows, calculating net obligations for each clearing cycle. This frees capital, reduces operational complexity, and guarantees that all trades are cleared with confidence.

We aggregate exposures across all your trades into a single net position per asset. Combined with central counterparty guarantees, this eliminates counterparty credit risk and ensures every trade is cleared securely and efficiently.

Subject to regulatory approval, ClearToken’s CCP will operate under Bank of England oversight, bringing the same rigorous standards that govern traditional financial market infrastructure to digital assets.

Read our Introduction to Clearing and learn how central counterparty clearing works and the vital role clearing houses/CCPs play in capital markets.

The Fundamentals

Market Solutions Essential Information

Solving Key Market Problems

From Bilateral Risk… to Guaranteed Completion

The Situation

• Most digital asset trading is bilateral, exposing each party to counterparty credit risk.
• If one counterparty fails, the other is left exposed to absorb the loss.

The Problem

• One default can trigger cascading failures, particularly during times of market stress when confidence and liquidity are already under pressure.
• Digital markets relying on bilateral trust are particularly vulnerable to this kind of contagion.

The Solution

• Shift your risk to us, by clearing through our central counterparty. ClearToken replaces a web of bilateral credit relationships with a single clearing counterparty, guaranteeing every trade we clear, even in the event of default.
• We become the buyer to every seller and the seller to every buyer, ensuring that trades complete even if one side defaults. Our digital clearing service removes bilateral exposure and reducing systemic risk.

From Individual Vetting… to Centralised Trust

The Situation

• Every firm in a bilateral market must independently assess the credibility and compliance of every trading partner.
• This becomes increasingly inefficient as the market grows and counterparties increase.

The Problem

• This creates significant operational burden, especially for regulated institutions subject to strict compliance, AML and KYC requirements.
• It slows onboarding, increases cost, and restricts access to trading opportunities, particularly in fragmented or opaque markets.
• Establishing bilateral relationships is high-risk in an evolving digital asset landscape rife with unregulated participants.

The Solution

• CCPs are highly regulated entities that can only accept strictly vetted market participants. As such, ClearToken, as a single, neutral counterparty, will perform standardised due diligence and onboarding for all applicants to meet regulatory requirements.
• Once a firm is approved as a clearing member, all other market participants can trade with them confidently, relying on our centralised trust framework. This shared trust layer expands market access, frees up compliance resources, and protects the system from cascading failures by ensuring every clearing member meets the same high bar.
• This streamlines compliance, unlocks liquidity, and allows clearing members to scale access without scaling overhead.

From Fragmented Margining… to Portfolio-Based Efficiency

The Situation

• Margin is typically managed on a per-venue, per-counterparty basis in digital assets

The Problem

• This leads to duplication, inefficiency, and limited visibility of overall exposure.
• This fragmented approach inflates margin requirements and requires manual reconciliation across platforms.
• Without coordinated risk modelling, firms can neither optimise their positions nor manage capital effectively.

The Solution

• ClearToken enables holistic margining across venues, reducing overall collateral requirements and increase capital efficiency.
• Our transparent, risk-based models enable efficient portfolio margining and clearer visibility of exposure across venues and counterparties, optimising and reducing overall collateral requirements.

From Disconnected Defaults… to Layered Protection

The Situation

• Bilateral markets offer little protection in the event of counterparty default. When one party fails, losses fall directly on the other, with little recourse.
• Without a shared mechanism for absorbing risk, recovery requires legal action, a slow or impossible process.

The Problem

• This model leaves market participants exposed and puts the stability of the market in the hands of the weakest link.
• A single failure can ripple across interconnected market participants, triggering a crisis of confidence and withdrawal of liquidity.
• In a growing digital market, such vulnerability undermines institutional confidence in digital asset trading and undermines efforts to grow the market.

The Solution

• ClearToken is bringing the same proven multi-layered default waterfall and default fund protections that underpin traditional markets to digital assets.
• Clearing members will contribute via initial margin, variation margin and a mutualised default fund, in addition to ClearToken’s own capital contribution.
• This shared protection mechanism reduces contagion risk, creates predictability under stress, and makes digital markets safer for all market participants.

From One-to-One Gross Settlement… to Multilateral Netting

The Situation

• Bilateral clearing creates a complex web of one-to-one exposures between market participants that cannot be easily simplified or offset.
• Each trading relationship requires its own credit terms and settlement instructions, multiplying operational and capital burdens as the market grows.

The Problem

• This fragmented structure inflates the amount of collateral market participants must hold, increases duplication of effort, and embeds systemic interconnectedness.
• As the number of counterparties increases, so too does the complexity of managing obligations, raising the risk of errors, delays, and miscalculations that impact market stability and capital efficiency.

The Solution

• ClearToken collapses these tangled exposures into a single net obligation per clearing member, per asset, through multilateral netting across all trades and all venues in the network.
• By calculating what each clearing member owes or is owed after offsetting all positions, we reduce the number of required settlement obligations, free up capital, and streamline post-trade operations.
• This model doesn’t just make individual firms more efficient; it makes the entire market more stable and scalable by reducing interdependencies and simplifying the flow of risk.

From Fully Prefunded… to Safely Leveraged

The Situation

• Digital asset trading platforms typically fully prefunded trading, meaning buyers must post at least 100% of the cash and sellers must post 100% of the asset in advance.
• This restriction exists because, in a bilateral model, there’s no central party to manage risk or guarantee settlement. This makes leverage trading too risky to support.

The Problem

• This lack of leverage reduces market efficiency and limits trading strategies that are standard in traditional finance.
• Institutions are forced to lock up large amounts of capital just to participate, hindering liquidity, reducing flexibility, and creating unnecessary barriers to entry.

The Solution

• ClearToken’s clearing service introduces trusted, centrally-managed margining; a prerequisite for safe leverage.
• Institutions can reintroduce leverage into digital asset strategies without taking on bilateral risk, unlocking capital efficiency and enabling more dynamic market participation.

From Shallow Silos… to Deep Liquidity

The Situation

• In today’s digital asset markets, liquidity is fragmented.
• Trading is often confined within isolated platforms, creating shallow pools of liquidity that don’t interact.

The Problem

• This fragmentation limits price discovery and reduces trading opportunities.
• It also creates friction and cost for market participants trying to operate across multiple venues—each with its own rules, processes, and risk exposures.

The Solution

• Centralised clearing unlocks deeper liquidity by connecting market participants across platforms.
• ClearToken acts as the common counterparty, enabling netting across venues, standardising risk management, and consolidating fragmented trading into a unified pool.
• By clearing through us, firms gain access to a wider range of counterparties without taking on more credit risk—enhancing liquidity while reducing exposure.

What Can Be Cleared

Subject to regulatory approvals, we intend to initially clear fungible perpetual futures contracts, spot and cleared repo:

Products

• Perpetual Futures
• Deliverable Forwards
• Non-Deliverable Forwards
• Term Futures
• Repo
• Options (second phase)

Asset Classes

• Cryptocurrencies
• Stablecoins
• Fiat Currencies
• Commodities (second phase)
• Equities (second phase)
• Fixed Income (second phase)

In time we expect to clear all digital asset and token instruments, including major cryptocurrencies and tokenised securities.

Who CT Clear Serves

ClearToken provides its services to institutional clients from traditional and digital financial markets.

Find out more on what firms can join through direct membership and indirect access on our Join CT Clear page.

Service Integration

This service will be integrated with CT Settle to provide 24/7 DvP net settlement through ClearToken Digital Securities Depository. Learn more about CT Settle.

Regulatory Compliance

Being regulated across all markets that we operate in is central to our ambition. ClearToken intends to be authorised and regulated in every jurisdiction in which it operates and maintain strict codes of conduct. Clearing membership will be subject to strict requirements to ensure that it is a trusted partner in the financial marketplace.

Contact

Connect with our Partnerships team to begin your clearing journey.