Derivatives marketplace operator CME Group will launch a bitcoin futures product on December 18, ending speculation as to when the much-anticipated offering would be available on the US markets.
"We are pleased to bring Bitcoin futures to market after working closely with the CFTC and market participants to design a regulated offering that will provide investors with transparency, price discovery, and risk transfer capabilities", said Duffy.
The Commodities Futures Trading Commission, the primary regulator for exchanges like the CME, gave approval for the exchange to create bitcoin futures after six weeks of discussions.
Bitcoin, which had been trading at around $10,150 United States on the Luxembourg-based Bitstamp exchange before the news, jumped following the news, leaving it up more than six per cent on the day. "As a result, we have had extensive discussions with the exchanges regarding the proposed contracts, and CME, CFE and Cantor have agreed to significant enhancements to protect customers and maintain orderly markets".
Earlier this week, the virtual asset broke the $10,000 mark for the first time and climbed to an all-time high of $11,395 before dropping 20 percent, according to the Luxembourg-based exchange Bitstamp. CME and CBOE have also agreed to enter into information-sharing agreements and to send the CFTC data on the settlement process so the regulator can conduct its own surveillance.
The futures will be cash-settled, meaning that no actual bitcoins change hands at the expiration of the contracts.
CFTC Chairman Christopher Giancarlo warned investors, however, that the nascent underlying bitcoin cash markets remained largely unregulated and mostly beyond the commission's purview.
CME Group, the world's largest futures exchange, has announced that it has self-certified the initial listing of its Bitcoin futures contract.
CME has been vying with CBOE to introduce the first bitcoin-related financial product.