Category Archives: Intercontinental Exchange

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CFTC Commissioner Says Sheer Pace of Fintech Has Stalled Bakkt Type Approvals

CFTC Commissioner Says Sheer Pace of Fintech Has Stalled Bakkt Type Approvals

CFTC Commissioner Christopher Giancarlo believes that the current period of innovation makes it challenging to approve proposals like Bakkt.

The U.S. Commodity Futures Trading Commission (CFTC) is an independent agency of the US government created in 1974, that regulates futures and options markets.

Bakkt had promised prospective clients it would request permission from the CFTC to provide the first Bitcoin futures that would be physically deliverable daily, as well as storing clients Bitcoin in a physical warehouse on their behalf. The CFTC suggested that Bakkt registers as a trust company to circumnavigate stalling compliancy issues.

With the news that the Intercontinental Exchange (ICE), the owners of the New York Stock Exchange, is now attempting to facilitate the launch of its delayed Bakkt platform by obtaining a New York cryptocurrency license, the complications that new crypto projects face are a sign of the times according to Giancarlo, who clarified the difficulties:

“The first is that we live in a period of exponential technological change. That is, the sheer speed of innovation has increased exponentially, both in terms of production of new models and products and their subsequent public adoption.”

Giancarlo makes it clear that the pace of change within the industry means that regulators simply can’t catch up with new innovations without what he calls “heightened technological literacy across leaders in business and government.”

However, he points out that cryptocurrency innovation could have saved the 2008 global financial crisis, commenting, “Today I want to take stock of the current state of blockchain technology and renew a focus on how it can impact – and improve – our markets,” adding:

“But imagine what a difference it would have made a decade ago on the eve of the financial crisis if regulators had access to the real-time trading ledgers of large Wall Street banks, rather than trying to assemble piecemeal data to recreate complex, individual trading portfolios.”

 

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Bakkt Gets Creative with NY Crypto License

Bakkt Gets Creative with NY Crypto License

The Intercontinental Exchange (ICE), owner of the New York Stock Exchange, is attempting to facilitate the launch of its delayed Bakkt platform by obtaining a New York cryptocurrency license to seemingly bring about a more favorable outcome, according to Bloomberg’s report.

The much-lauded physically delivered Bitcoin futures platform – Bakkt – which is expected to further the adoption of Bitcoin to both institutions and retail investors, has been delayed for five months, with currently no date set for launch, as CEO Kelly Loeffler hinted:

“While we’re not yet able to provide a launch date, we’re making solid progress in bringing the first physical delivery price discovery contracts for Bitcoin to the .S, where price formation will occur in federally regulated, transparent markets.”

The delay has been for the most part due to custody concerns from the Commodity Futures Trading Commission (CFTC) which considered the custody infrastructure currently in place to be inadequate. Moreover, the regulator’s rules require clearinghouses to deposit customer funds at a bank or trust company – none of which Bakkt is, according to the report. Although, the CFTC had earlier suggested Bakkt register as a trust company to circumnavigate the concern.

CFTC had granted Chicago Mercantile Exchange Inc (CME) and the Chicago Board Options Exchange (CBOE) self-certification based on the fact that they settled their futures contract in cash, unlike in the case of Bakkt where settlements will be in Bitcoin, which raised the initial concerns of custody given the nature of asset theft in the cryptocurrency industry. Moreover, the regulator alongside CME and CBOE agreed to significant enhancements to protect customers.

ICE hopes a New York crypto license will influence the regulator’s decision positively, given that the license grants the Bakkt platform permission from New York’s Department of Financial Services to hold tokens.

In the background, the Bakkt project continues to develop as it grows its workforce as well as acquire asset relevant to its development.

 

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Intercontinental Exchange Lists More Details Ahead of Delayed Bakkt Launch

Intercontinental Exchange Lists More Details Ahead of Delayed Bakkt Launch

Bakkt has announced more details of its Bitcoin futures contracts, which was due for launch on the 25 January but suspended until a later date pending regulatory approval.

The Intercontinental Exchange platform will be offering physically delivered daily futures contracts in BTC/USD using the exchange’s own electronic trading platform following the launch later this quarter.

The new post from Intercontinental Exchange has listed more details.  The trading screen product name for the futures offered will be “Bakkt BTC (USD) Daily Future” and 1BTC in size. Its price will be set in US dollars up to two decimal places. The minimum price fluctuation is expected to be around USD 2.50 per contract, reducing to 1c per bitcoin on block trades of 10 BTC or more. There is no upper limit planned on daily prices with exchange and clearing fees of 50c per side of a trade.  A limit of 100,000 lots in any one contract date will be enforced.

The Bakkt Bitcoin Futures will trade on Eastern Prevailing Time between 20:00 and 18:00, with a pre-open at 19:55. Daily settlements will be scheduled between 16:58 and 17:00 each day. Delivery of the futures contracts will be overseen by a custody solution named Bakkt Warehouse.

Bakkt’s platform is now waiting for approval from the Commodities Futures Trading Commission (CFTC) and once this final regulatory step is given a green light, it appears that Bakkt will be ready for the opening as all the operational procedures have already been finalized and published for traders and investors.

It is thought that Bakkt’s entry into the cryptocurrency market with an open platform for all manner of cryptocurrency services, including trading and warehousing could be another carrot for institutional investors, and consequently trigger a Bitcoin recovery in 2019.

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Bakkt Acquires “Certain Assets” from Rosenthal Collins Group

Rosenthal Collins

Intercontinental Exchange-backed digital asset platform Bakkt has announced the acquisition of assets of Rosenthal Collins Group (RCG), in the furtherance of its objective to build the first integrated, institutional grade exchange-traded markets, and custody solution for physical delivery of digital assets.

CEO of Bakkt Kelly Loeffler made the announcement in a blog post yesterday, stating that the project had entered into an agreement with RCG – an independent futures commission merchant – to build on the experience established by the business.

RCG is a 95-year old Chicago-based futures brokerage business which announced last December that it was selling off its customers’ business to Marex Spectron – another world-renowned commodities brokers – out of which Bakkt had opted in to obtain a part of the business assets.

According to Loeffler, the acquisition of “certain valuable assets” was necessary for the development of the Bakkt platform. She highlighted enhancement of risk management and treasury operations with systems and expertise as possible areas of benefits of the new acquisition while expressing her enthusiasm about onboarding the team from RCG.

As per the announcement, there might be a possible delay in the launch of the Bakkt platform as initially scheduled for this month. Loeffler said: “This acquisition underlines the fact [that] we’re not standing still as we await regulatory approval by the CFTC for the launch of regulated trading in our crypto markets.”

The team is sure putting in a tremendous amount of efforts to meet the expectations of the masses after being lauded as a platform to make a significant impact in cryptocurrency adoption since its introduction in August last year.

Loeffler made this clear when she said, “Our mission requires significant investment in technology to establish an innovative platform,” adding that “financial market expertise” is an essential component to developing the “most trusted fintech ecosystem for digital assets”.

Despite the delay, their tracks so far have been lined with some degree of success. The recent seed funding of over USD 182 million goes on to show that a lot of key players are supportive of a successful launch of the platform.

 

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90-Year-Old Hong Kong Billionaire “Superman” Backs Bakkt

90-Year-Old Hong Kong Billionaire

The owner of venture capital firm Horizon Ventures, Li Ka-shing, has become the latest proponent of cryptocurrency platform Bakkt investing heavily in Bitcoin. Bitcoin backers abound around the world but experience wise with his 90 years, Hong Kong billionaire Li Ka-shing, known affectionally as Superman, is way up there.

The Bakkt project has delayed its launch twice in a row with a timeline now set for early 2019, in line with CFTC’s process and timeline.

Bakkt has already announced its successful first seed funding round of USD 182 million with 14 investors and partners listed to have participated. Intercontinental Exchange, Goldfinch Partners, Boston Consulting Group, Microsoft’s Venture Capital arm and Pantera Capital were among participants.

Li, who is said to be worth about USD 34.9 billion, has made some major forays into the cryptocurrency space late in his business career, including Bitpay in 2013 and Blockstream in 2016, through his company Horizon Ventures. Bitpay also attracted another “Superman”, British Virgin entrepreneur Sir Richard Branston, who also put about USD 30 million of his money into the Bitcoin payment service provider headquartered in Atlanta.

The Bakkt Bitcoin platform, which is being developed with New York Stock Exchange owner Intercontinental Exchange, Starbucks, and Microsoft, will offer Bitcoin futures trading once the launch date has been announced, opening up the opportunity for users to buy, sell, store and spend cryptocurrencies through MS Cloud. Global coffee chain Starbucks will allow customers to convert Bitcoin and other cryptocurrencies to US dollars to make purchases in their stores.

 

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As Bakkt Looms, Wall Street Boss Says Bitcoin Here to Stay

As Bakkt Looms, Wall Street Boss Says Bitcoin Here to Stay

Jeff Sprecher, CEO of the NYSE’s parent company Intercontinental Exchange (ICE), has asserted that digital assets will survive, regardless of the market’s dips and dives as seen over the past weeks.

A firm backer of Bitcoin, Sprecher had announced that, with the help of technology partner Microsoft, ICE was planning to launch a new digital asset platform called Bakkt. Starbucks and Microsoft will be major partners of the much-anticipated platform Bakkt and are reportedly going to accept Bitcoin and other cryptocurrencies.

The excitement surrounding Bakkt is centered around its plans to launch physically-settled Bitcoin futures by January next year; recent market sentiment is thought to have postponed the launch, originally scheduled for late 2018.

Sprecher reflected on recent events in the market and Bitcoin’s current position: “Somehow Bitcoin has lived in a swamp and survived… There are thousands of other tokens that you could argue are better but yet Bitcoin continues to survive, thrive and attract attention… Often times in finance, it’s not about being the best — it turns out to be about being the broadest and the most commonly accepted and for whatever reason Bitcoin has become that.”

Despite SEC commissioner Hester Peirce declaring in a 24 November podcast that long-awaited ETF approvals are “definitely possible”, the SEC warns that these won’t be any time in the near future. Kelly Loeffer, Bakkt’s CEO and wife of the NYSE chairman, claims that Bakkt is creating its own opportunities for the future, stating:

“We’re creating that infrastructure that doesn’t exist today, which we think is a big opportunity for institutional investors to come in.”

As for the future, Nasdaq seems unfazed and retains a bullish optimism with its plans to launch Bitcoin futures in 2019 through its partnership with VanEck . Both Nasdaq and the NYSE forging ahead towards becoming cryptocurrency exchanges and Nasdaq’s CEO Adena Friedman asserted that over time the exchange giant could become a cryptocurrency exchange once “the sector matures”.

Clearly, major players are not simply waiting on the SEC for ETF game-changing thumbs up in 2019. New Year’s resolutions are already being made.

 

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Starbucks Pro-Bitcoin but You Can’t Spend It in Stores Yet

Misleading reports following the Starbucks working partnership with the Bakkt ecosystem stated that Starbucks would be accepting Bitcoin in stores.

While this is not on its agenda quite yet, the multinational corporation has expressed its support for helping customers exchange their cryptocurrencies for fiat to spend in its over 27,000 cafes.

Partnership with Bakkt

Starbucks is the flagship retailer of Bakkt and has been given the role of developing trusted and regulated working relationships with clients who wish to exchange their Bitcoin to spend in retail stores.

Misleading headlines from outlets such as CNBC that ran with ‘New Starbucks partnership with Microsoft allows customers to pay for Frappuccinos with Bitcoin‘ appear to misunderstand the dynamic of the scheme and assume Bitcoin could directly be used to purchase goods.

A spokesperson for Starbucks spoke to Motherboard to clarify the logistics of its partnership, reaffirming that the exchange is merely a platform to change cryptocurrencies into US dollars that the cafe chain and other outlets can accept. Starbucks did not rule out the possibility of accepting Bitcoin in the future, however, saying it would continue to consider customers wants alongside the changing regulatory space.

Maria Smith, vice president of partnerships and payments for Starbucks, described the corporation’s role as ”pivotal” in the early stages of Bakkt.

Bringing it mainstream

The Bakkt venture is a Wall Street-regulated platform aiming to bring Bitcoin to a mainstream audience, with its founding members including Microsoft and the Intercontinental Exchange (ICE). Bakkt CEO Kelly Loeffler described its purpose as helping ”unlock the transformative potential of digital assets” on an international scale.

A press release from Starbucks Friday notes that the federally-regulated marketplace will, for now, facilitate trades just for Bitcoin to fiat as it is currently the most liquid digital currency.

 

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Brian Kelly Proclaims That Bakkt Is Biggest Crypto News of the Year

Hedge fund manager Brian Kelly, while appearing on CNBC’s Fast Money, has called Intercontinental Exchange’s announcement about its new Bakkt platform as the “biggest news of the year.”

Intercontinental Exchange (ICE), the parent company of the New York Stock Exchange (NYSE), recently announced that with the help of technology partner Microsoft, it was planning to launch a new digital asset platform called Bakkt.

ICE also owns 23 exchanges worldwide apart from the NYSE along with many futures exchanges and clearing houses.  Starbucks and Microsoft will be major partners of Bakkt and will begin accepting Bitcoin and other cryptocurrencies. Bakkt is also planning on launching physically-settled Bitcoin futures by November 2018, which would be a mechanism for institutional investors worldwide to easily buy Bitcoin.

Kelly explained his “biggest news of the year” statement after rejecting that ETF would be approved by the SEC this year, suggesting that he’s not actually optimistic on them being approved in 2018, but the speculation surrounding them will maintain investor interest in Bitcoin regardless of the outcome.

He thinks that ICE’s move is better than Bitcoin futures due to its limitations, given that there are “a limited set of people that can trade it… And a lot of people use it for hedging.”

He recently stated that the last Bitcoin price boost following the CNBC announcement was here to stay, only to see the market drop again a week later. When asked if the ICE announcement might have more effect on prices and whether it would meet with success, he responded:

“Oh, yeah! Absolutely! I mean, they are talking about launching in November… They have been working on this in stealth mode for the last 14 months, they have already talked to regulators, they are ready to go.”

He put the lack of market response to “the biggest news of the year” down to time difference and that he expected there would be a response. Bitcoin at the time of writing is $7,473.89 (CMC). He suggested:

“Back in January, Bitcoin would have gone up 20% on this news. So, I think the bear market has just broken people’s spirit, frankly, and so people aren’t really looking for this… A lot of people I talked to today hadn’t seen the news–came out at 08:30 [UTC -04:00]–people hadn’t seen it till 2, 3 in the afternoon. So, the market is still digesting this, and remember most of Bitcoin trading happens in Asia; so, it was released at 08:30 this morning, that’s 09:30, 10:00 at night on a Friday night in Asia. [When] Asia wakes up, you might see this thing pop.”

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