- Intercontinental Exchange Inc is working on the first bitcoin futures that pay out in cryptocurrency
- They are working with the CFTC to ensure that the project is in line with the current regulations
- A decision will be made in early 2019
According to a report published by The Wall Street Journal, on December 20, 2018, the first cryptocurrency futures contract is due to get regulatory approval soon.
The contract is being launched by Intercontinental Exchange Inc, the owner of the New York Stock exchange and is aimed at bringing in institutional investment. Many of these investors have previously been wary of the cryptocurrency industry due to fears about manipulation and fraud.
By investing in Bitcoin futures, investors will be able to place bets on the future price of Bitcoin. This future is unique in that, unlike others that already exist, it pays out in cryptocurrency rather than fiat currency.
This futures project already has backing from big names such as Microsoft Inc and Starbucks Inc. There are plans to help increase individual, everyday use of cryptocurrency for small purchases.
“Once digital assets have more trust and regulation, people will be more comfortable using digital assets as currency,” said Kelly Loeffler, chief executive of Bakkt.
Bitcoin futures have already been launched on big exchanges such as Cboe Global Markets and CME Group. These listings helped grant legitimacy to cryptocurrency on Wall Street, something that had previously eluded it.
Now, the launching of a futures that pays in cryptocurrency only sets the bar higher.
“It’s great to have cash-settled, but there’s a need for physical delivery” of bitcoin, Ms. Loeffler said.
Staying on track
One of the many preparations that have been put in place ahead of the futures launch is making sure that it stays in line with laid down regulations.
Officials from the Commodity Futures Trading Commission have been working hand-in-hand with the team at ICE to make sure that the plans are in line with their regulations.
This project will, however, receive an exemption from the Commodity Futures Trading Commission to hold bitcoin on behalf of investors as current regulations only make provisions for fiat currency, securities, and agricultural commodities.
There have also been measures put in place to prevent cyber attacks and secure investors’ assets in the event that one occurs.
For now, the commission is reviewing the business plan and will likely vote on it in early 2019. After this, the public will have about a month to weigh in on it.