Afters months of deliberation it turns out that the path for bitcoin futures trading is almost cleared with a US regulator giving the green signal on Friday for bitcoin futures to trade on major exchanges.
The CFTC has waved its green flag allowing Chicago Mercantile Exchange and CBOE Futures Exchange to offer contracts for Bitcoin futures. This enables the exchanges to allow for trading of bitcoin without taking ownership of the underlying asset i.e. bitcoin and this also means that traders will not be dealing in the actual currency.
CFTC chair J. Christopher Giancarlo said after “extensive discussions with the exchanges” they “agreed to significant enhancements to protect customers and maintain orderly markets.”
According to the regulator, the exchanges have agreed to modify the derivatives contracts and promised to coordinate with the CFTC as wel as each other to ensure that traders and investors have protection against market manipulation and other irregularities. One important thing to keep in mind is that the regulator stressed that CFTC agreement to enable bitcoin futures trading doesn’t mean that it endorses the digital currency or the various trading products.
The regulator warned that investors should be aware of the potentially high level of volatility and risk involved with bitcoin futures and their trading.
The announcement comes a day after a Federal Reserve governor Randal Quarles, the Fed’s vice chair of banking regulation, warned that digital currencies like bitcoin could pose a threat to financial stability as they gain wider use because of the uncertainty of how they would fare during a crisis.
As of this writing, bitcoin prices are on an upwards trend again and currently trading at around $11,770 – over 6 per cent higher than yesterday’s prices.