Bakkt, the upcoming Bitcoin platform of Intercontinental Exchange (ICE), the company that owns the New York Stock Exchange, has revealed more details about its planned launch of BTC futures.
Testing begins in July
In a recent blog post, Bakkt’s chief operating officer Adam White said that the platform would commence “user acceptance testing” for its two Bitcoin futures contracts on July 22. The Bitcoin futures – a daily and a monthly contract – will be listed and traded at ICE Futures U.S. and cleared at ICE Clear US.
“This launch will usher in a new standard for accessing crypto markets,” White wrote in the June 13 blog post. “Compared to other markets, institutional participation in crypto remains constrained due to limitations like market infrastructure and regulatory certainty. This results in lower trading volumes, liquidity, and price transparency than more established markets”.
Solving existing challenges
Bakkt has identified a number of challenges currently limiting the scope and scale of crypto futures markets and are working on finding appropriate solutions. Those include providing an “end-to-end regulated environment offering qualified custody of bitcoin with contracts traded on federally regulated markets”; applying strict anti-money laundering and know-your-customer requirements and extensive screening to ensure that Bitcoin and market participants are not affiliated with unlawful activities. The new platforms offerings also differ from rival Bitcoin futures products in that they are physically-settled contracts rather than cash-settled. This means that participants receive Bitcoins, instead of fiat money, on the contract’s expiration.
Bakkt is also aiming to create an environment that customers are used to see when dealing with established markets. To that end, the platform will offer features such as block trades; a fee holiday through the end of the year to encourage trading; market maker incentive programs to encourage liquid markets; and integrations with ISVs and regulated brokerage platforms.
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