Bakkt, an institutional cryptocurrency trading platform led by the Intercontinental Exchange (ICE), is reportedly considering obtaining a New York BitLicense. Because the CFTC is reluctant to approve its bitcoin futures, sources close to the matter said that Bakkt believes the New York license will help ease the Commission’s concerns.
Bakkt Faces Issues with US Regulators
Bringing Bitcoin to the masses is the endgame of the crypto industry. While its decentralized nature should make the crypto unappealing to corporations, it is widely believed that institutional investors will ultimately bring mass adoption to the industry.
The Intercontinental Exchange, the owner and operator of the New York Stock Exchange (NYSE), was planning to do just that with Bakkt, a highly regulated Bitcoin ecosystem. The project announced in August last year, Bakkt was supposed to encourage pension funds, endowments, and similar institutions to invest money in the crypto space. However, it has thus far remained in regulatory limbo.
The highly-anticipated platform has been delayed for several months as the main US regulator, the Commodity Futures Trading Commission (CFTC), remains skeptical of the project. The issue that caused the Commission the most concerned is the way clients’ tokens will be stored and protected from theft and manipulation.
BitLicense Could Convince CFTC to Greenlight Bakkt
Sources revealed that ICE is considering applying for a license from New York financial regulators in order to placate the agency. The so-called BitLicense would allow Bakkt to hold custody of customers’ tokens itself, said three of the people close to the project.
The CFTC recognizes state bank and trust licenses and could let ICE list futures through a self-certification process if it obtains permission from New York’s Department of Financial Services to hold tokens,