Kelly Loeffler, the CEO of Bakkt, a subsidiary of Intercontinental Exchange (ICE), announced on Friday (August 16) that Bakkt will be launching custody and physically-delivered daily and monthly Bitcoin futures contracts on September 23.
On 3 August 2018, Intercontinental Exchange (ICE), a leading operator of global exchanges, clearing houses, data and listings services, announced that it planned to form a new subsidiary named Bakkt that would be creating "an integrated platform that enables consumers and institutions to buy, sell, store and spend digital assets on a seamless global network."
Mopre specifically, ICE said that "as an initial component of the Bakkt offering," ICE's "U.S.-based futures exchange and clearing house plan to launch a 1-day physically delivered Bitcoin contract along with physical warehousing in November 2018, subject to CFTC review and approval."
Until the Bakkt Institutional Digital Asset Summit on July 18, what we knew (according to a blog post by Bakkt COO Adam White) was that on July 22, Bakkt planned to start user acceptance testing (UAT) for its Bitcoin futures products.
We also knew from Bakkt's Frequently Asked Questions (FAQ) guide that:
- The first two contracts to be listed by ICE Futures U.S. are "Bakkt Bitcoin (USD) Daily Futures" and "Bitcoin (USD) Monthly Futures".
- In order to provide "regulated custody in the Bakkt Warehouse, Bakkt has filed with the New York State Department of Financial Services (NYDFS) for approval to form a limited-purpose trust company that would serve as a qualified custodian of bitcoin under applicable law."
- Bakkt expected to launch its platform in H2 2019 following the completion of UAT and "receipt of regulatory approval from NYDFS."
Then, on July 20, Sam Doctor, a Managing Director and Quantamental Strategist at Independent research boutique Fundstrat Global Advisors, released on Friday (July 19) a report on Bakkt Institutional Digital Asset Summit (July 18); one of the many interesting takeaways was that the full launch of the Bakkt platform is expected is to take place later this quarter.
In a blog post published earlier today, Loeffler said that that on September 23 their Bitcoin futures contracts will be launched in partnership with ICE Futures U.S. and ICE Clear US.
She went on to say that their futures contracts had already "received the green light from the CFTC through the self-certification process" and that user acceptance testing had already started (on July 22).
Now that Bakkt has received permission from the New York State Department of Financial Services (NYDFS) to create Bakkt Trust Company (a qualified custodian), Bakkt Warehouse (which is part of Bakkt Trust Company) will be able to handle custody for physically-delivered Bitcoin futures.
The Bakkt CEO says that this will offer their customers "unprecedented regulatory clarity and security alongside a regulated, globally accessible exchange in a market underserved by institutional-grade infrastructure."
She concludes by saying that until the launch date, they will "continue onboarding and testing with market participants."
Reaction From the Crypto Community on Twitter
When it comes to U.S. regulatory issues and crypto, one of the best commentators is Jake Chervinsky, who is currently General Counsel at DeFi startup Compound.
This is what he had to say about the significance of this announcement:
Q: Why is @Bakkt important for adoption of bitcoin?— Jake Chervinsky (@jchervinsky) August 16, 2019
A: It offers a way for large, risk-averse institutions to buy and custody bitcoin through an end-to-end regulated system approved by the CFTC and NYDFS, and backed by the sterling reputation of ICE. Compliance lawyers rejoice!
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