Intercontinental Exchange (ICE)’s plans to launch bitcoin futures in November of last year have been delayed because of regulators.
According to a report in The Wall Street Journal citing people familiar with the matter, plans for ICE, which owns the New York Stock Exchange, to roll out the bitcoin futures contract are being delayed by the Commodity Futures Trading Commission, which has to give its green light.
According to the paper, what’s holding up approval is a disagreement about how Bakkt (the name for the bitcoin futures) should be regulated. Bakkt had originally planned to hold bitcoins for customers but gave up on that after the Commodity Futures Trading Commission said it would require disclosure of its business plan and period of public comment, which would have delayed the approval even more. The regulator and Bakkt are currently in talks about different ways to handle the futures contract so that it meets the rules governing how it protects customers’ funds. “We are working through the regulatory review process and are looking forward to updating the market soon,” an ICE spokesman told The Wall Street Journal.
Bakkt has been seen as a way to legitimize bitcoin and bring it to the masses. The ICE unit has already inked deals with Microsoft and Starbucks and has raised $182.5 million in investor funding, including from ICE, Microsoft’s venture capital unit and Boston Consulting Group, noted the paper. The long term aim is to regulate cryptocurrency so it can be used by consumers to make retail purchases.
The deal comes as bitcoin has been suffering from a steep price decline since the end of 2017. Back then it was trading near $20,000. More recently it’s valued at around $4,000. Trading on cryptocurrency exchanges has declined since late 2017 and initial coin offerings have been far and few between.
ICE wants to launch the bitcoin futures on the exchange where U.S. natural gas, cotton and coffee futures are listed. It plans to price the bitcoin futures daily, which would help tighten the relationship between the price of the bitcoin futures and the price of bitcoin. But that also means it has to handle the crypto funds for customers, which has sparked the delay in getting approval.