CME, CBOE to Begin Bitcoin Futures Trading
U.S. derivatives giant CME Group will launch bitcoin derivatives trading on December 18 following approval from regulators.
U.S. financial firms CME Group, CBOE and Cantor Fitzgerald revealed today they will list financial products offering exposure to cryptocurrencies starting December 18.
First unveiled in an announcement by the U.S. Commodity Futures Trading Commission (CFTC), the regulator said all three companies will pursue a self-certified initial listing, after working with the agency to set a standard for the offerings.
The reveal comes just weeks after CME indicated via its website that it would launch the product on December 11, before retracting the remarks, and months after CBOE revealed it, too, would seek to launch a futures product.
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.
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.
Ready to trade
Warnings aside, those listing the products expressed optimism about their release.
In remarks, Terry Duffy, CME Group chairman and CEO, said he believes the Chicago-based exchange, as well as its peers, have put in place the necessary safeguards for the listing.
"We are pleased to bring bitcoin futures to market after working closely with the CFTC and market participants to design a regulated offering that will provide investors with transparency, price discovery and risk transfer capabilities."
At launch, Duffy explained the bitcoin futures product will be subject to risk management tools, including a margin of 35 percent, position and intraday price limits. The new contract will be traded on the CME Globex platform.
For more on CME's views on its forthcoming product, view our interview with managing director of equity products, Tim McCourt, below.
Live from Invest with Tim McCourt https://t.co/tdG8dJxiOf
— CoinDesk (@coindesk) November 28, 2017
Disclosure: CME Group is an investor in Digital Currency Group, CoinDesk's parent company.
CME image via Shutterstock
The leader in news and information on cryptocurrency, digital assets and the future of money, CoinDesk is a media outlet that strives for the highest journalistic standards and abides by a strict set of editorial policies. CoinDesk is an independent operating subsidiary of Digital Currency Group, which invests in cryptocurrencies and blockchain startups. As part of their compensation, certain CoinDesk employees, including editorial employees, may receive exposure to DCG equity in the form of stock appreciation rights, which vest over a multi-year period. CoinDesk journalists are not allowed to purchase stock outright in DCG.
Learn more about Consensus 2024, CoinDesk’s longest-running and most influential event that brings together all sides of crypto, blockchain and Web3. Head to consensus.coindesk.com to register and buy your pass now.