The exchange is joining forces with investment firm VanEck, to offer contracts referencing a broad index of bitcoin prices, taken from across 50 exchanges.
CME Group's contracts will debut December 18.
CME Group Inc (NASDAQ:CME) is getting closer to solidifying its place as a key cog in the fast-growing world of cryptocurrencies. While no official start-date was confirmed, CBOE contracts, which will trade on its CFE futures exchange under the XBT ticker, were made available for participant testing on November 13. Normally, a hedge consists of taking an offsetting position in a related security, such as afutures contract.
The futures will be cash-settled, meaning that no actual bitcoins change hands at the expiration of the contracts.
See why new money and talent have already flooded into the cryptocurrency market. "But the IRS says it's property, the SEC said now some digital currency is a security, and FinCEN says digital currency is a 'money-like instrument, '" said Adam White, general manager of GDAX, a cryptocurrency exchange owned by Coinbase. "This would represent a new opportunity for mischief."Are ETFs next?".
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Christopher Giancarlo said after "extensive discussions with the exchanges" they "agreed to significant enhancements to protect customers and maintain orderly markets". There are other ways the new futures could spur more vigorous oversight of the cryptocurrency. CBOE said it would set a launch date in the near future. Or that is what the Moscow Stock Exchange claims, at least.
The CBOE started talking to the Commodity Futures Trading Commission several months ago about offering the product in response to client demand, Concannon said.
In order to regulate trading, all three exchanges and the Commission will be heavily regulating trading, as well providing the Commission with additional surveillance information regarding the futures. Many authorities have held back, studying what to do.CME Chief Executive Officer Terrence Duffy sped up that process in October when he disclosed his plan for futures.
Bitcoin rebounded on Friday to hit the day's highs above $10,500 US, recovering from an earlier dip below $9,500 US, after the U.S. derivatives regulator said it would allow CME Group and CBOE Global Markets to list bitcoin futures.