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After a long waiting period, Bakkt finally has a launch date for its Bitcoin Futures contracts. As per the official announcement by Bakkt, the company will be launching bitcoin futures on 23rd September 2019 to institutional clientele. This update was made public yesterday via Bakkt’s official blog post on Medium.
Per the blog post, Bakkt has obtained the New York State Trust Charter by the NYDFS (New York State Department of Financial Services). This has enabled the firm to unveil its much-delayed custody, as well as physically-settled BTC futures contracts, next month. The firm will be offering two kinds of futures contracts: monthly and daily. For this, they have collaborated with ICE Clear US and ICE Futures US.
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The approval from the NYDFS will allow the company to form a qualified custodian called the Bakkt Trust Company. The trust company will have Bakkt Warehouse that will be responsible for bitcoin custody of physically-settled bitcoin futures. The Medium blog post, penned by the CEO of Bakkt Kelly Loeffler, also stated that Bakkt’s contracts have received the CFTC approval already via the procedure of self-certification. The CEO further disclosed that they have already started the UAT (user acceptance testing).
The Warehouse would offer consumers unmatched security and regulatory clarity along with a globally accessible and regulated exchange in an underserved institutional-class infrastructure market, added Loeffler.
Throwing more lights on their offering, Loeffler said that their futures contracts wouldn’t depend on the unregulated spot markets when it comes to settlement prices. Hence, it will serve as the transparent mechanism for price discovery for the benchmark bitcoin price. This will prove to be a key difference as there have been many reports of manipulation in the spot market activities. Apart from that, there are other concerns as well, such as weak compliance control and inconsistency in anti-money laundering (AML) policies.
Clients will be able to exchange-trade the futures contracts by Bakkt on ICE Futures U.S. As far as clearing the contracts is concerned, ICE Clear U.S. will be handling it. Both these organizations come under the federal regulation of the United States Commodity Futures Trading Commission. What’s more interesting is Bakkt’s futures contracts will get coverage by ICE Clear US’ current guarantee fund. According to the CEO, they have designed the Bakkt Warehouse in such a way that it’s able to offer secured and regulated bitcoin custody with insurance protection of 125 million dollars.
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It’s worth noting that Bakkt originally planned to introduce its physically-settled BTC futures offering in December last year which got postponed. Then in January 2019, the firm again delayed the launch. The testing of the contracts had begun in July this year, but the company was awaiting a trust license to fully go about the launch.
