US financial firms, CME Group, CBOE, and Cantor Fitzgerald, have confirmed that the negotiation of financial products that offer exposure to cryptocurrency will begin on January 18, as it had been announced by the media.
Initially, it was an announcement by the US Commodity Futures Trading Commission (CFTC), the regulator of the derivatives markets of the North American country that said the three firms were working on an initial sale of certified products, after working with the state agency to create a series of standards for placements.
The announcement came to light weeks after it was published through the CME Group website that it would launch the product in this month, and months after the CBOE said that they had the clear intention to launch the future type products.
Both CME and CBOE will offer different contracts that offer investors exposure to different reference rates that do not necessarily need custody of the underlying asset. CME will have a reference rate created jointly with Crypto Facilities, while CBOE will use the data from the exchange house in the cryptocurrency that is based in New York.
However, J. Christopher Giancarlo, who is the Commissioner of the CFTC, warned that his agency could not regulate everything in this business, as it had no capacity to control the underlying liquidity markets for the Bitcoin trading.
More specifically, Giancarlo said that market participants should take into account that the young cash markets and the Bitcoin negotiation itself were unregulated and that over them, the CFTC has a very limited statutory authority. The regulator also indicated that it would remain vigilant on the new market of nascent derivative products on Bitcoin.
The CFTC stated that it intends to “make sure if further changes are needed in the design of the contracts and in the adjustment processes and work with the designated markets to make the necessary changes in the coming months.”
Warnings aside, the companies that are going to place the new products expressed optimism about the launch. For example, Terry Duffy, president and CEO of the CME Group, said he believed that the Chicago market, as well as its counterparts, have made the necessary security measures to make the placement.
We are delighted to bring Bitcoin futures to the market after working hand in hand with the CFTC and other market members to design a regulated offering that provides investors transparency, pricing and risk management.
On the other hand, Duffy commented Bitcoin futures, these will be subject to risk management tools, especially the margin of 35%, as well as the different limits on the positions and prices of Intraday.