Reuters Futures contracts tied to bonds issued by the European Union look increasingly likely to be launched next year as the bloc39;s outstanding debt grows, an EU official said on Thursday, a step that would significantly boost trading in these securities.

The EU has become one of the world39;s biggest bond issuers in less than three years after setting out to raise up to 800 billion euros 842.80 billion in common debt by 2026 to finance a postCOVID recovery fund.

The bloc has boosted efforts this year to raise the profile of the EU bonds so that it is treated by financial markets as a government borrower.

The EU official said that 500 billion euros of outstanding debt was seen by the markets as the amount needed to create a big enough bond market that could support a futures contract.

We will reach this number in 2024, so this requirement would be fulfilled next year, he said.

Futures contracts are derivatives through which investors can buy or sell underlying securities at a future date, allowing them to hedge their positions.

The world39;s biggest bond markets, including U.S. Treasuries and German Bunds, are supported by futures markets, considered key tools to deepening their breadth and liquidity.

Deutsche Boerse39;s derivatives exchange Eurex has been working to launch futures for EU bonds since 2021.

Asked about the timing of a launch, a Deutsche Boerse spokesperson said We have moved from if to when, which is driven by us closely working with all key…