Cboe Digital, a leading global exchange operator, announced that it has obtained approval from the Commodity Futures Trading Commission (CFTC) to introduce margin futures for bitcoin and ether. The announcement marks a significant development in the cryptocurrency market because the approval signifies a major step forward in integrating cryptocurrencies into traditional financial markets, Cboe said in its press release.
Notably, the regulatory agency battling the crypto industry the strongest is the Securities and Exchange Commission (SEC). Bitcoin and ether are not on the list of digital assets that the SEC considers unregistered securities.
“We are grateful to the CFTC for working with us as we continue to build out our vision for a transparent, U.S.-regulated crypto marketplace that welcomes intermediaries,” said John Palmer, president.
Margin futures allow traders to amplify their positions by borrowing funds, thus providing increased trading opportunities and the potential for higher returns. By launching margin futures for bitcoin and ether, Cboe Digital aims to attract a broader range of investors and facilitate greater liquidity in these popular cryptocurrencies.
“Chicago-based Cboe moved aggressively into digital assets a little over a year ago with its acquisition of ErisX, a crypto trading platform rebranded as Cboe Digital. Just a few months later, Cboe took a non-cash writeoff of $460 million on the acquired business, after the financial meltdown of major crypto exchange FTX raised questions about crypto’s future,” writes Steve Daniels in Crain’s Chicago Business.
The firm also plans to seek regulatory approval for options, he reports. It’s a natural evolution, given that options make up most of the exchange’s trading volume.
This move also signifies the growing acceptance and recognition of cryptocurrencies as a legitimate asset class in the financial industry.