The U.S. Commodity Futures Trading Commission said on Friday it would allow CME Group Inc (NASDAQ: CME) and CBOE Global Markets Inc (TIKER: CBOE.NASDAQ) to list Bitcoin (EXANTE: Bitcoin) futures, after the rival bourses showed their proposed contracts and trading arrangements met necessary requirements, Reuters reported.
CME said on Friday it would list its Bitcoin futures contract, which like CBOE’s will be priced against and settled in the cash Bitcoin market, on Dec. 18. CBOE has not yet set a launch date but has said it plans its listing by year-end.
To guard against volatility,CME and CBOE will enact stricter-than-usual risk-management safeguards, including initial margin requirements of between 35 percent and 40 percent.
In remarks, Terry Duffy, CME Group chairman and CEO, said he believes the Chicago-based exchange, as well as its peers, have put in place the necessary safeguards for the listing.
"We are pleased to bring Bitcoin futures to 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."
CME and CBOE have also agreed to enter into information-sharing agreements and to send the CFTC data on the settlement process so the regulator can conduct its own surveillance.
The futures exchanges must coordinate to help spot market manipulation, flash rallies,trading outages and other problems on the unregulated exchanges where Bitcoin is traded, as they could affect futures prices.
Nasdaq Inc also plans to list a futures contract based on Bitcoin in 2018.