CME Group's contracts will debut December 18.
Bitcoin has gained more mainstream attention as its price has soared on the private exchanges.
Bitcoin Price Pushes Above $10500 on US Futures Listings
CME and CBOE have agreed to enter into information-sharing agreements and send the CFTC data on the settlement process so the regulator can conduct its own surveillance. Normally, a hedge consists of taking an offsetting position in a related security, such as afutures contract.
"Commission staff will additionally conduct reviews of designated contract markets, derivatives clearing organizations (DCOs), clearing firms and individual traders involved in trading and clearing bitcoin futures", the CFTC's statement concludes.
In a speech on the payments system, he said that in times of crisis, demand for liquidity among bank depositors often shoots up, putting major financial institutions under strain, but it is not clear how digital currencies would perform in similar situations. Transaction costs are relatively high for BTC. There are other ways the new futures could spur more vigorous oversight of the cryptocurrency. The cryptocurrency dropped below US$9,000 the following day, but has since rebounded to trade as high as US$10,740 in early trading on Friday. CBOE said it would set a launch date in the near future.
The CFTC expects to be assessing the situation as it evolves after the prospective launch of the contracts to determine whether further changes are required to the contract design and settlement processes.
What is speculation:Speculation is the act of trading in an asset or conducting a financial transaction that has a significant risk of losing most or all of the initial outlay with the expectation of a substantial gain. "That does create a potential problem."Ever since digital currencies began emerging, US regulators have faced a big dilemma: The laws that empower watchdogs and delineate their areas of responsibility were written decades ago when money was minted on paper, companies turned mainly to the stock market for capital, and commodities came from farms, mines or wells".
The U.S. Commodity Futures Trading Commission notes that it will be closely monitoring trading activity around bitcoin due to it being "a commodity unlike any the commission has dealt with in the past". "I would just say that we have been having active dialogue with a lot of clients and with partners about what might be possible over time".