New Bakkt Announcement: Serving Institutions by Problem Solving Crypto Asset Infrastructure


Bakkt will be a new cryptocurrency exchange for institutions created by Intercontinental Exchange (ICE) in partnership with other companies. However, is not clear what Bakkt is going to be doing in the market. Kelly Loeffler, CEO of Bakkt, has written a blog post in which she answers this question, explaining which problems that Bakkt is trying to solve and how it would be developed.

What Would Bakkt Solve?

Bakkt is working with the intention to address the requirements of regulated institutions, clients and stakeholders, including merchants and consumers.

Our goal is to make digital assets more liquid, trusted and accessible

Loeffler explains that Bakkt will be creating new products using the existing infrastructure in the market. It is clear that launching a product is a complex exercise that takes time and money. However, the CEO says:

We believe it’s time to close the gap between the frameworks for mainstream asset classes and digital assets.

The new exchange will be using existing infrastructure, including regulated futures market. In this way, the platform will be able to introduce physically delivered daily Bitcoin futures to the global market. This would include strict Anti-Money Laundering (AML) regulations and Know Your Customer (KYC) rules. Moreover, the exchange will be following reporting standards at the federal regulation level that are subject to final review by the U.S. CFTC.

All aspects of the existing futures market, including institutional-grade onboarding and compliance will, for the first time, be part of physical delivery and warehousing of Bitcoin.

The company will be providing physically delivered bitcoin futures contracts in many different currencies, including USD, GBP and EUR. A customer would buy one USD/BTC futures contract and it will be receiving a Bitcoin on its account.

So as to meet the institutional demand and their standards for market integrity and security, the clearing and warehousing infrastructure will be developing a new level of technology. This would allow firms to connect to the market in a safe way.

This infrastructure will be incorporating the latest levels of physical, technology and information security, thus safeguarding digital assets.

Finally, Loeffler says that the exchange will be fulfilling the needs of large financial institutions and what they require to operate in the market. That includes access to FIX API’s, consolidated ticker feeds, regulatory reporting features and also, participation agreements.

Loeffler commented:

“While there are many aspects of Bakkt that we’ll continue to develop and share, our initial focus is supporting regulated institutions in serving customers in this emerging asset class.”

Bakkt is being built in time-tested and regulated futures markets, that is what makes of it special. As of now, Bakkt is set to launch on November 5th, 2018. It will be an exciting day for the crypto industry.

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