U.S. regulator to allow CME, CBOE to list bitcoin futures

Barron's On Why Bitcoin Has Stormed Wall Street

A Cboe spokesperson initially told CNBC the bitcoin futures launch is expected "probably before the end of the year", but later clarified, saying the exchange could not know a specific date. (CME) and CBOE Futures Exchange (CFE) self-certified contracts for bitcoins futures.

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 December 18.

"Bitcoin, a virtual currency, is a commodity unlike any the Commission has dealt with in the past", said CFTC Chairman J. Christopher Giancarlo.

In addition, the Cantor Exchange has approved a new contract for binary options on bitcoin.

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.

"Market participants should take note that the relatively nascent underlying cash markets and exchanges for bitcoin remain largely unregulated markets over which the CFTC has limited statutory authority. Nevertheless, investors should be aware of the potentially high level of volatility and risk in trading these contracts".

Under CFTC regulations, designated contract exchanges such as CME and CBOE's CFE do not need prior approval from the commission to list products for trading. The activities will include monitoring and analyzing the size and development of the market, positions and change in positions over time, open interest, initial margin requirements, and variation margin payments.

The new contract will be accessible to traders via the CME Globex electronic trading platform, and for submission for clearing via CME ClearPort.

The exchanges assured the CFTC that the new products complied with the rules under a process of self-certification.

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