Cboe submits product certification for bitcoin futures

Cboe submits product certification for bitcoin futures

Cboe submits product certification for bitcoin futures

The Commodities Futures Trading Commission, the primary regulator for exchanges like the CME, gave approval for the exchange to create bitcoin futures after six weeks of discussions.

A federal regulator gave the go ahead on Friday to the CME Group to start trading bitcoin futures later this month, the first time the digital currency will be traded on a Wall Street exchange and subject to federal oversight.

The launch date of CBOE's bitcoin futures, which will trade under the ticker symbol XB, will be announced shortly. "As a result, we have had extensive discussions with the exchanges regarding the proposed contracts, and CME, CFE and Cantor have agreed to significant enhancements to protect customers and maintain orderly markets".

CME Group's Bitcoin futures will be cash-settled, based on the CME CF Bitcoin Reference Rate (BRR) which serves as a once-a-day reference rate of the USA dollar price of bitcoin, said CME.

"Bitcoin, a virtual currency, is a commodity unlike any the commission has dealt with in the past", says Christopher Giancarlo, CFTC chairman, in a statement.

The bitcoin price rallied to a 24-hour high following the announcement that US derivatives exchange CME has self-certified to list bitcoin futures contracts in mid-December.

The exchanges assured the CFTC that the new products complied with the rules under a process of self-certification. CBOE has not yet set a launch date but has said it plans its listing by year-end.

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. After a record high on Wednesday for bitcoin price of $11,377, there was a 20 percent drop from profit takers down to $9,021; it has since fluctuated several times and is now selling at around $10,500.

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