United States approves bitcoin futures but Brits plan regulatory crackdown

Ann Santiago
December 5, 2017

Cboe Global Markets Inc. said Monday it will start trading bitcoin futures on December 10, after receiving the go ahead last week from United States futures regulator CFTC.

Chicago-based CBOE said trading will start on its CBOE Futures Exchange at 5 p.m Central Time on Sunday, the beginning of global trading hours, with December 11 being the first full day. While CME's announcement sent bitcoin's price hurtling past the $11,000 mark for the second time last week, CBOE's release hasn't had the same effect.

CME, which owns various derivative trading platforms such as the Chicago Mercantile Exchange, said in a statement on Friday that there will be risk-management measures in place as bitcoin is a "new, uncharted market".

The cryptocurrency was last up 0.7 percent at $11,324.

Ed Tilly, Chairman and Chief Executive Officer of Cboe Global Markets, said: "Given the unprecedented interest in bitcoin, it's vital we provide clients the trading tools to help them express their views and hedge their exposure. To promote this, we will initially offer XBT futures trading for free".

Cboe and CME got approval from the US derivatives regulator to list bitcoin futures on Friday, after the rival bourses were able to show that their proposed contracts and trading arrangements met the necessary regulatory requirements. The first bitcoin futures contracts on a regulated USA exchange are set to launch on Sunday.

At CBOE, the contract limit is 5,000. They will also be cash-settled, similar to CME's bitcoin futures. Market data from bitcoin exchanges Bitstamp, GDAX, itBit, and Kraken will be used to calculate CME's once-a-day Bitcoin Reference Rate (BBR). The entry of institutional money is also expected to act as a stabilizing mechanism for the cryptocurrency's recent wild price swings.

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