CME Won’t Add New Crypto Futures Contracts Anytime Soon, CEO Reveals

  • Chicago Mercantile Exchange (CME) CEO Terry Duffy recently revealed the exchange won't add altcoin futures anytime soon.
  • This as the company doesn't want to speculate on their success.

The chief executive officer of one of the world’s largest exchanges, the Chicago Mercantile Exchange (CME), recently revealed the platform isn’t going to add altcoin futures contracts in the near future, and that it’s taking a “wait and see” approach with bitcoin.

According to Bloomberg Terry Duffy, the chief executive, revealed bitcoin futures contracts “might have been the most controversial launch of a product” he’s seen in his four decades in the trading business.

During an interview, Duffy stated:

I will not just put products up there to see where they’re going to go. I will take a wait and see approach with Bitcoin for now.

Terry Duffy

The CME introduced bitcoin futures contracts to its platform shortly after a rival, the Chicago Board Options Exchange (CBOE), listed the product. CME’s contracts are five times larger than those CBOE trades. Per Bloomberg, trading volumes for both have been “relatively modest” since their introduction.

Nevertheless, as CryptoGlobe covered, the average trading volume of CME’s bitcoin futures grew by 93% over the previous quarter, with the rate of open interest (OI), the number of open contracts, growing by 58% to exceed 2,400 this quarter.

The trading volume, however, seemingly doesn’t affect Duffy as his words seem to show he’s betting on bitcoin futures for the long-run. He said:

We’re not seeing huge flows regardless and that’s OK. This is going to take some time one way or another and we’ll do it the right way.

Terry Duffy

This year, CME has traded an average of 3,063 contracts a day, as opposed to CBOE’s 5,881. Given the contracts’ size, CME is winning as its daily average works out to 15,317 BTC per day, twice the amount CBOE trades, according to Bloomberg data.

While Duffy revealed he doesn’t want derivatives novices to trade BTC futures because they are “highly volatile and new,” the CBOE has hinted it’s looking to expand its cryptocurrency futures offering, potentially meaning altcoin futures contracts are coming.

Both CME and CBOE are among the biggest exchanges in the world. They aren’t, however, the only ones offering cryptocurrency futures contracts. As covered, UK-based cryptocurrency exchange Crypto Facilities launched Ethereum futures earlier this year, while another UK-based platform, Coinfloor, launched physically settled bitcoin futures.

Notably, bitcoin’s price dropped from a near $20,000 all-time high when both CME and CBOE listed BTC futures. Some analysts, including prominent bitcoin bull Tom Lee, believe the financial product is behind the market’s “gut-wrenching” drop, as “dramatic price changes” occur when contracts expire.

BBC: Facebook Planning to Launch ‘GlobalCoin’ in Q1 2020

Siamak Masnavi

Social networking giant Facebook is planning to launch its own cryptocurrency (internally dubbed "GlobalCoin") and crypto-powered global payments network (internally called "Project Libra") worldwide by Q1 2020, according to a report published earlier today by BBC News, the world's largest broadcast news organization.

Project Libra's Origin Story

  • 8 May 2018: In a post on Facebook, David Marcus, the former head of Messenger, who was at that time also a board member (since December 2017) of crypto exchange Coinbase, revealed that he was leaving that role to set up a new group focused on exploring applications of blockchain technology across the whole of Facebook.
  • 13 December 2018: Cheddar reported that Facebook’s blockchain group is planning to "potentially disrupt the entire payments industry":

"At a private dinner Facebook hosted during a recent crypto conference, one attendee told Cheddar that Facebook employees pitched the idea of creating a decentralized digital currency for the social network’s 2 billion users."

  • 21 December 2018: Bloomberg reported that Facebook was creating its own cryptocurrency (a stablecoin) for money transfers within its highly popular messaging app WhatsApp.
  • 28 February 2019: The New York Times confirmed Bloomberg's earlier story, and said that, according to its sources, this project was "far enough along that the social networking giant has held conversations with cryptocurrency exchanges about selling the Facebook coin to consumers."
  • 8 April 2019: Nathaniel Popper, one of the two journalists who wrote the report in the New York Times, provided this update (on Twitter) about Facebook's cryptocurrency project:
  • 2 May 2019: The Wall Street Journal reported that Facebook was "recruiting dozens of financial firms and online merchants to help launch a cryptocurrency-based payments system," and that the core part of this initiative (code-named "Project Libra") is "a digital coin that its users could send to each other and use to make purchases both on Facebook and across the internet." Furthermore, this report said that, according to people familiar, Facebook was talking to "financial institutions including Visa Inc., Mastercard Inc. and payment processor First Data Corp." about investing in this project.
  • 17 May 2019: A report by Reuters said that FinTech company Libra Network was registered in the Republic and Canton of Geneva on May 2. Looking at the entry for Libra Networks, which was published on May 7 in the Swiss Official Gazettte of Commerce (SOGC), tells us:
    • Libra Networks LLC (registration number: CHE193533388) has its registered office in Geneva.
    • According to the English translation, the stated purpose of this company is "provision of services in the fields of finance and technology, as well as the development and production of related software and infrastructure, particularly in connection with investment activities, the payment operation, the financing, identity management, data analysis, big data, blockchain and other technologies."
    • The share capital is CHF 20,000 (100 shares, each with a nominal value of CHF 200); all of the shares are owned by Facebook Global Holdings II, LLC.

Facebook's Stablecoin: GlobalCoin

Here is what we have learnt from the BBC News report:

  • Facebook "is planning to set up a digital payments system in about a dozen countries by the first quarter of 2020."
  • The plan is to start testing the new cryptocurrency (some kind of stablecoin), GlobalCoin, by the end of 2019.
  • Facebook has been getting "advice on operational and regulatory issues" from the UK's central bank governor Mark Carney (whom Facebook founder and CEO Mark Zuckerberg reportedly met in April) and from U.S. Treasury officials.
  • Facebook is also in talks with global remittance firms such as Western Union "as it looks for cheaper and faster ways for people without a bank account to send and receive money."

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