CBOE Holdings has agreed a deal with Gemini Trust Company, which will see the exchange group receive an exclusive global license to use Gemini’s bitcoin market data for bitcoin derivatives and indices.
Gemini is a digital asset exchange and custodian that allows customers to buy, sell and store digital assets such as bitcoin and ether. Gemini is a New York trust company that is subject to fiduciary obligations, capital reserve requirements and banking compliance standards of the New York State Department of Financial Services (DFS).
Under the terms of the agreement, CBOE will have a multi-year exclusive global license permitting it to use Gemini’s market data, including Gemini daily bitcoin auction values, in the creation of bitcoin derivatives products for listing and trading.
Pending regulatory review by the US Commodity Futures Trading Commission (CFTC), cash-settled bitcoin futures are planned to be made available for trading on CBOE Futures Exchange (CFE) by the fourth quarter of 2017. Moreover, CBOE will retain exclusive rights to use Gemini market data for the creation of new indexes, as well as rights to distribute Gemini market data over CBOE’s market data feeds.
Ed Tilly, CBOE Holdings chairman and CEO, says: “CBOE is not only a home to options, derivatives and the VIX, but also ETF innovations and foreign exchange. This makes us the natural choice for the development and trading of bitcoin futures. We very much look forward to responding to the growing interest in cryptocurrencies through the creation of bitcoin futures traded on a regulated derivatives exchange, with the many expected benefits that this brings, including transparency, price discovery, deep liquidity and centralised clearing.”
He continues: “Gemini has demonstrated time and again its foresight and expertise in this area of finance. The team’s focus and determination to grow the bitcoin market and secure appropriate regulatory oversight as a New York trust company makes them ideal for this venture. We are incredibly proud of this agreement and look forward to all that we can achieve together.”
Tyler Winklevoss, CEO of Gemini, comments: “Gemini’s key concerns in the cryptocurrency ecosystem have always been security, compliance and regulatory oversight. By working with the team at CBOE, we are helping to make bitcoin and other cryptocurrencies increasingly accessible to both retail and institutional investors.”
Over the last five years, the total value of all bitcoin outstanding has grown from less than $1 billion to nearly $50 billion. The total value of all cryptocurrency tokens outstanding is now approximately $100 billion.