CME Group Is Pleased to Bring Bitcoin Futures to the Market on December 18
On November 20 the firm CME Group published an error on the company’s bitcoin futures web page stating that its new bitcoin derivatives products would launch on December 10. Later that day, the company announced it was a mistake, and that the date was incorrect. Now on December 1, the exchange has announced its bitcoin-based self-certified initial listings will be available on December 18. Terry Duffy, CME Group’s Chairman and Chief Executive Officer explains;
We are pleased to bring Bitcoin futures to the market after working closely with the CFTC and market participants to design a regulated offering that will provide investors with transparency, price discovery, and risk transfer capabilities.
A Continued Collaboration With U.S. Regulators and Reputable Cryptocurrency Trading Platforms
CME Group’s bitcoin futures products will be available for trade on the CME Globex electronic trading platform. Alongside this, the futures have been submitted for the CME Clearport on Sunday, December 17 and trading will begin the following day. The bitcoin futures provided by CME will be cash-settled by referencing the CME CF Bitcoin Reference Rate (BRR). The rate is based on a daily rate utilizing the USD price of bitcoin across multiple spot exchanges.
“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,” CME’s CEO details.
At launch, our new Bitcoin futures contract will be subject to a variety of risk management tools, including an initial margin of 35 percent, position and intraday price limits, and a number of other risk and credit controls that CME Group offers on all of its products.
The options exchange has been calculating and publishing the BRR with the help of Crypto Facilities Ltd. The calculation window for the aggregated trade flow ends at 4:00 pm London time. Further, CME details the BRR utilizes the “IOSCO Principles for Financial Benchmarks,” alongside leveraging well-known cryptocurrency exchange spot prices from Kraken, Itbit, GDAX, and Bitstamp. The news also follows JP Morgan and Nasdaq revealing they plan to offer bitcoin futures contracts as well.