Heath Tarbert, the chairman of the United States Commodities and Futures Trading Commission (CFTC) says that the first Ethereum futures will arrive by 2020. Just ten days back, the CFTC chairman confirmed that Ethereum is a ‘commodity’ just like Bitcoin.
Speaking at the DC Fintech Week at Georgetown University, Tarbert told Chris Brummer that ETH futures could “absolutely” arrive within the next six to twelve months. He cautioned that launching new futures contracts doesn’t mean there’s absolute demand for the product. Tarbert said:
“I’d say it is likely that you would see a futures contract in the next six months to a year. The volume to which it’ll trade, no idea, that’s where the markets decide, but my guess is now that we’ve provided at least … a little bit more clarity on [ether’s eligibility for futures contracts], my guess is market participants will consider that.”
One thing is clear at this time that the CFTC is open to giving a go-ahead to anyone launching Ethereum futures contracts. But the most important question is are there enough buyers for it. Moreover, who is currently willing to offer ETH futures services to its client.
Responding to a CoinDesk query, a CME spokesperson said that they have no plans for new cryptocurrency futures. “Right now, we are focused on bringing options on CME Bitcoin futures to market in Q1 2020 and continuing to grow our CME CF Reference Rates and Real-Time Indices,” the spokesperson said.
Approving the ETH Futures
CFTC chairman Heath Tarbert said that the agency will perform thorough checks before approving any Ethereum futures product. He added that the companies planning to launch ETH futures will have to follow a similar procedure as in the case of Bitcoin. Tarbert said:
Exchanges “could start it on their own or they could come to us with an application and ask us to grant it to be able to [offer the product]. Now in the past most people have not been self-certifying, they’ve been coming to us particularly if they’re creating an entirely new exchange and DCO [derivatives clearing organization] so it’ll depend I think in large part on who wants to have it on their trading platform. Is it one of our existing exchanges that’s been working with the CFTC for years or is it an entirely new platform that wants to specialize in it?”
He further added that having a CFTC-regulated exchange offering ETH futures will assure the traders that there’s no market manipulation. “What our markets do, and [have been] doing for 150 years is ensure there’s sufficient price transparency,” he said. “You know that there’s the buyers and the sellers and that price actually represents real aggregate demand.”
Besides, Tarbert also throws some light that there is a fair-possibility of other cryptocurrency products coming to market, ahead.
Bhushan is a FinTech enthusiast and holds a good flair in understanding financial markets. His interest in economics and finance draw his attention towards the new emerging Blockchain Technology and Cryptocurrency markets. He is continuously in a learning process and keeps himself motivated by sharing his acquired knowledge. In free time he reads thriller fictions novels and sometimes explore his culinary skills.