Bitcoin Futures: From Self-Certification to Systemic Risk

December 2017 marked a milestone in the short history of virtual currency. On Friday, December 1, 2017, the Chicago Mercantile Exchange Inc. (CME) and the CBOE Futures Exchange (CFE) self-certified new contracts for cash-settled bitcoin futures products. The self-certification process allows designated contract markets (DCMs) to list new derivative products one day after submitting in writing to the Commodity Futures Trading Commission (CFTC) that the product complies with the Commodity Exchange Act (CEA) and CFTC regulations.

Prior to December 2017, there were limited options for investors that wanted access to bitcoin derivatives. In 2014, TeraExchange, LLC, a Swap Execution Facility … Read more