A few days ago, the US Commodity Futures Trading Commission (CFTC) gave an official nod to Bitcoin-based contracts in its operations. Sooner, the commission said it would permit three exchanges to self-certify Bitcoin-related futures contracts. This latest move by the commission comes hot on the heels when investors and traders are yearning for Bitcoin investment. After the announcement, the price of Bitcoin went up on a dramatic rise from $9,300 to $10,800 according to CoinMarketCap.
With the new products in place, it’s anticipated that new investors will embrace the Bitcoin currency, especially those who would like to invest in the currency but feel uncomfortable with its security. In an online statement, the CFTC announced that the Chicago Mercantile Exchange Inc. (CME), the Cantor Exchange, and the CBOE Futures Exchange (CFE), would implement changes to meet the regulator’s requirements for approving what they call a radical new asset class.
In the words of the Commission’s Chairman, J. Christopher Giancarlo, the Commission has never dealt with any virtual commodity in the past. For that reason, the commission held extensive consultations with the exchanges with regard to the proposed contracts. On their part, CME, CFE, and Cantor yielded to major improvements that will help them protect their customers and help them maintain orderly markets.
However, the Chairman warned that the primary cash markets and exchanges for Bitcoin are unregulated and exist beyond the CFTC’s control. In partnership with the commission, the exchanges (CME, CFE, and Cantor) have put in place a fitting standard for oversight regarding the said contracts. The standard is in line with the commission’s limited statutory power to watch over the Bitcoin cash market.
In response to the commission’s announcement, one of the exchanges, CME, did not hesitate to announce its self-certification. According to them, Bitcoin futures trading would kick off on December 18, 2017.
On their Twitter handle, CMEGroup tweeted:
“We’ve self-certified to launch our Bitcoin futures contract Monday, December 18.”
The tweet went viral, attracting close to 3000 reactions and more than 2000 re-tweets. However, the contracts will be made in dollars and not in Bitcoin.