U.S. regulator to allow CME, CBOE to list bitcoin futures

The announcement by the Commodity Futures Trading Commission (CFTC) paves the way for CME and CBOE to become the first traditional US regulated exchanges to launch trading in bitcoin-related financial contracts, a watershed moment for the cryptocurrency that could lead to greater regulatory scrutiny.

The CFTC has had extensive discussions with the exchanges over the past few months as they have developed these products, resulting in "significant enhancements to contract design and settlement", among other changes, the regulator says in its announcement. Due to its volatility, bitcoin futures will be subject higher margin levels and intraday price limits, the CME said.

The launch date of CBOE's bitcoin futures, which will trade under the ticker symbol XB, will be announced shortly.

CFTC Chairman Christopher Giancarlo warned investors, however, that the nascent underlying bitcoin cash markets remained largely unregulated and mostly beyond the commission's purview. "Though we have worked through a lengthy, comprehensive process with the CFTC to get to this point, we recognize bitcoin is a new, uncharted market that will continue to evolve, requiring continued collaboration with the Commission and our clients going forward". While CFTC approval isn't required, the regulatory body could have halted the CME's plans if it wasn't satisfied with the self-certification. CBOE has not yet set a launch date but has said it plans its listing by year-end.

These new derivatives open the doors for institutional investors, as well as introducing the possibility of more cryptocurrencies becoming available in the future.

Earlier this week, the virtual asset broke the $10,000 mark for the first time and climbed to an all-time high of $11,395 before dropping 20 percent, according to the Luxembourg-based exchange Bitstamp.

  • Eleanor Harrison