Intercontinental Exchange’s US-based futures exchange and clearinghouses plan to launch a 1-day physically delivered bitcoin contract along with physical warehousing in November 2018. These regulated venues will establish new protocols for managing the specific security and settlement requirements of digital currencies. The effort is designed to address evolving needs in the estimated $270 billion digital asset marketplace, and part of a larger design for which ICE is forming a new company, Bakkt.
Bakkt will use Microsoft’s cloud to create an open and regulated, global ecosystem for digital assets. The new company is working with Boston Consulting Group, Microsoft and Starbucks towards this end. Bakkt is expected to include federally regulated markets and warehousing along with merchant and consumer applications. Its first use cases will be for trading and conversion of bitcoin versus fiat currencies, as bitcoin is currently the most liquid digital currency. In addition, the clearing house plans to create a separate guarantee fund that will be funded by Bakkt.
In addition to Intercontinental Exchange and M12, Microsoft’s venture capital arm, investors in Bakkt are expected to include, among others, an affiliate of Fortress Investment Group, Eagle Seven, Galaxy Digital, Horizons Ventures, Alan Howard, Pantera Capital, Protocol Ventures, and Susquehanna International Group.