Big news today struck the cryptocurrency world, as CME group, CBOE, and Cantor Fitzgerald revealed that they will list financial products offering exposure to cryptocurrencies. Individuals will be able to take part in these products come December 18. The U.S. Commodity Futures Trading Commission (CFTC) announced all three companies will pursue their own self certified initial listing.after working with the agency to set a standard for the offerings. CME and CBOE share a the same strategy by offering cash – settled contracts, allowing investors to buy exposure to different rates without requiring custody of the asset. CME will utilize a custom reference rate created with partner Crypto Facilities, while CBOE intends to use data from the New York based cryptocurrency exchange Gemini.
With the offering of Bitcoin futures the CFTC Commissioner J. Christopher Giancarlo warned against the thought that the products are regulated under it’s full oversight. Giancarlo referenced their “limited statutory ability” to oversee the underlying cash markets for bitcoin trading. Warnings aside, the company’s that are listing the bitcoin futures are very optimistic about their release. Terry Duffy, Chairman and CEO of CME Group, believes that the exchange have put necessary safeguards in place for the listing.
Duffy also added the risk management tools that will be put in place for the launch of the futures. CME Group put in place a margin of 35 percent, position, and intraday price limits.The new contract will be traded on the CME Globex Platform.