Wednesday , 21 March 2018

CME and CBOE plan to launch Bitcoin futures trading

U.S. financial firms CME Group, CBOE and Cantor Fitzgerald revealed today they will list financial products offering exposure to cryptocurrencies starting December 18.

Both CME and CBOE will offer cash-settled contracts that will find investors buying exposure to different reference rates that will not require custody of the asset. CME will use a custom reference rate created with partner Crypto Facilities, while CBOE intends to use data from the New York-based cryptocurrency exchange Gemini.

Cantor Exchange, a subsidiary of Cantor Fitzgerald, will offer bitcoin binary options beginning on the above date.

However, in remarks, CFTC Commissioner J. Christopher Giancarlo was quick to caution against the idea that the products would be regulated under its full oversight, noting its “limited statutory ability” to oversee the underlying cash markets for bitcoin trading.

He said:

“Market participants should take note that the relatively nascent underlying cash markets and exchanges for bitcoin remain largely unregulated markets over which the CFTC has limited statutory authority. There are concerns about the price volatility and trading practices of participants in these markets.”

Elsewhere, the CFTC sought to frame itself as a participant in the launch, indicating it had held discussions with CME, Cantor and CBOE for months prior to today’s news.

The regulator also indicated that it would maintain a close watch on the nascent market for bitcoin-tied financial products. The CFTC said that it intends to “assess whether further changes are required to the contract design and settlement processes and work with the [designated contract markets] to effect any changes” over time.

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