Why were Bakkt Bitcoin Futures delayed? Unnamed sources have revealed the reason as the crypto trading platform seeks to obtain a license from another regulator.
April 19, 2019, | AtoZ Markets - The widely anticipated crypto trading platform, Bakkt, from Intercontinental Exchange, the parent company of the New York Stock Exchange (NYSE), has been facing resistance from federal regulators over its plans to bring Bitcoin to the masses. And now, the owner of the NYSE is turning to state financial regulators to get the project over the goal line.
Bitcoin Futures Exchange Bakkt still not approved
The startup, which is currently under review by the Commodity Futures Trading Commission (CFTC) seeks permission to launch physically-settled BTC futures. However, unnamed sources, according to Bloomberg, have revealed that the regulator’s primary reservation is Bakkt’s ability to provide cryptocurrency custody services for its customers.
To meet the regulator’s requirements and to become fully compliant, Bakkt is required to satisfy the Commission’s laid down rules regarding clearinghouses. Those rules stipulate that clients’ funds are deposited at a bank or a trust company and Bakkt is neither of these.
“To placate the agency, ICE is considering seeking a license from New York financial regulators that would permit Bakkt itself to hold custody of customers’ tokens, said three of the people, who asked not to be named because the discussions aren’t public. Should ICE secure a state license it would still need sign-off from the CFTC on the broader Bakkt project.”
The crypto trading platform was originally hoping to launch in January 2019. However, ongoing scrutiny by regulators has continued to push the launch date.
Bakkt could speed up Bitcoin adoption
ICE’s Bakkt intends to allow institutional investors to trade by offering them BTC futures different from those launched by CME and CBOE in December 2017. The difference is that once one-day futures contracts on BTC expire on Bakkt, investors would get their profit in Bitcoins, not U.S. dollar.
The regulated crypto trading venue that Bakkt wants to offer could persuade banks and pension funds to use Bitcoin in a more secure manner than what unregulated exchanges offer.
Besides, Bakkt intends to get retail BTC payments working on a regular basis by collaborating with the Starbucks network, where when buying coffee, Bitcoins will be easily converted to USD, thus allowing consumers to pay in crypto.
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