Bakkt Platform To Begin Bitcoin Futures Testing From July 22, Seeks Insurance for Custody
After delaying its Bitcoin Futures launch several times due to regulatory uncertainties, ICE’s institutional grade cryptocurrency trading platform Bakkt is all set to begin the testing of Bitcoin Futures contracts from July 22 next month.
In the official blog post, Bakkt COO Adam White states that the platform will soon start the user acceptance testing (UAT) of Bakkt’s physically-settled Bitcoin futures contract that will be trade at ICE Futures U.S.
Adam White notes that Bakkt’s launch of Bitcoin Futures will set up new standards for accessing the crypto market. He notes that factors like regulatory uncertainties and lack of market infrastructure have proved as hurdles from driving institutional players in the crypto market.
This has led to the continuing issues of price transparency, liquidity, and lower trading volumes. To push the launch of its Bitcoin Futures, Bakkt also announced its own crypto custodial solutions that will be completely regulated.
Considering the requirements of financial institutional players, the Bakkt platform plans to offer comprehensive trading solutions. Mr. White notes that Bakkt’s ability to handle the industry challenges, looking to ICE’s track record, will be a major booster to the digital assets marketplace.
The blog post notes: “Bakkt also brings all the other features that institutions would expect in a versatile and broadly accessible market, including block trades; a fee holiday through the end of the year to encourage trading; market maker incentive programs to encourage liquid markets and integrations with ISVs and regulated brokerage platforms.”
Announced last year in August 2018, ICE’s Bakkt was earlier scheduled to launch in December 2018. However, it has been facing constant hiccups. Firstly, the U.S. government shutdown delayed the launch till mid-February 2019. Secondly, the U.S. regulator CFTC has been waiting for Bakkt getting the license for crypto custody due to the very nature of its Bitcoin Futures contracts which are physically settled.
Bakkt is now looking to be a qualified custodian having a trust license along with $100 million in insurance to secure the storage of Bitcoin tokens tied to the futures contacts. The blog post notes: "Subject to regulatory approval, Bakkt's limited purpose trust company will serve as a qualified custodian for bitcoin, will operate separately from ICE's futures exchange, will be insured for $100M, and will have separate governance”.