ICE’s Crypto Trading Platform Bakkt To Begin Bitcoin Futures Testing In July

Announcements, News | May 15, 2019 By:

Bakkt, a digital assets platform developed by the Intercontinental Exchange (ICE), is planning to roll out testing for its physically-settled bitcoin futures products in early July.

Bakkt, first announced in August 2018, is a cryptocurrency platform that aims to bring digital assets to the mainstream and help unlock the potential of the technology. The firm wants to create a “seamless” global ecosystem for cryptocurrencies that would cover the spectrum from federally regulated markets and warehousing to merchant and consumer needs.

In a blog post, Bakkt CEO Kelly Loeffler announced that Bakkt had “worked closely” with the US Commodity Futures Trading Commission (CFTC) to develop contracts that meet customers’ needs for trading, transparency, and market certainty, while ensuring compliance with Federal regulations, and will soon introduce bitcoin futures trading testing on a federally regulated futures exchange.

“In conjunction with our exchange and clearing partners at ICE, we’ll be working with our customers over the next several weeks to prepare for user acceptance testing (UAT) for futures and custody, which we expect to start in July,” Loeffler said. “We’ll provide more details in upcoming posts, but we expect to use UAT to ensure that customers have time to onboard and can test the trading and custody model we’ve built to their satisfaction.”

According to Bakkt, its bitcoin futures contracts, developed in collaboration with ICE Futures U.S. and ICE Clear US, have been shaped by their conversations with stakeholders, and offer unique trading, security and risk management feature.

In its filing with the CFTC, ICE Futures US said that Bakkt will be listing two futures contracts – a daily settlement bitcoin future, which will enable customers to transact in a same-day market, and a monthly bitcoin futures contract that will enable trading in the front month and across the forward pricing curve.

“Bakkt will contribute $35 million into the clearinghouse risk waterfall,” Loeffler said. “This puts our own “skin in the game” and aligns our interests for market integrity and safety with market participants. For physical delivery and secure storage of bitcoin, an integrated custody service will be fulfilled by Bakkt’s qualified custodian, subject to regulatory approval.”

Last month, Bakkt acquired Digital Asset Custody Company (DACC), a crypto custodian service, for an undisclosed amount to further develop secure storage solutions for digital assets. The firm also filed with the New York Department of Financial Services (NYDFS) for approval to become a trust company, which will enable the firm to serve as a Qualified Custodian for digital assets.