CME’s BTC Index Provider CF Benchmarks Receives EU License

CME’s BTC Index Provider CF Benchmarks Receives EU License
September 17, 2019


The cryptocurrency market continues to trade mixed and within a narrow range. Bitcoin (BTC) is holding above $10,000 level. The cryptocurrency has lost 1.2% in the past 24 hours to trade at $10,222, reflecting a market capitalization of $183.34 billion. Ethereum (ETH) is surprisingly going against Bitcoin’s trend. With a gain of 1.5% Ether is trading at $197.26. Likewise, XRP is trading at $0.2599, representing a loss of 1.0% in the past 24 hours. Other altcoins which have lost in the past 24 hours include EOS (EOS-$4.06, -1.7%), Cardano (ADA-$0.0472, -0.2%), Bitcoin Cash ($206.17, -0.3%), Huobi (HT-$4.03, -0.6%),  Ethereum Classic (ETC-$6.18, -2%), Binance Coin (BNB-$20.14, -2.9%), and Cosmos (ATOM-$3.26, -7.3%), Monero (XMR-$74.69, -1.1%), Stellar (XLM-$0.0586, -0.3%), OKB (OKB-$2.71, -1.8%) and IOTA (IOTA-$0.2484, -1.8%). Altcoins which have appreciated in the past 24 hours include Litecoin (LTC-$72.56, 1.2%), Tron (TRX-$0.0157, 0.3%), Dash (DASH-$92.46, 2.4%) and LEO (LEO – $1.08, 1.9%).


Government level initiatives

France to tax crypto-to-fiat trades only

Bruno Le Maire, French economy minister, has stated that French officials will not tax crypto-to-crypto trades, but will implement taxation of crypto-to-fiat currency trades. In this regard, the minister said: “We believe that the moment the gains are converted into traditional money is the right time to assess tax.”

The strategy mentioned above of taxing cryptocurrency trades would assist in monitoring transactions, which remains a key challenge in crypto-to-crypto trading. Le Maire also spoke about applying Value-Added Tax (VAT) to cryptocurrencies.

Specifically, Le Maire mentioned that VAT should apply to cryptocurrency trades only when they are utilized to purchase an asset or any other service.


CF Benchmarks acquires a license from FCA

CF Benchmarks, which provides Bitcoin (BTC) index to CME Group, has successfully obtained a benchmark license from the UK’s FCA (Financial Conduct Authority). While revealing the receipt of license under the European Benchmarks Regulation (EU BMR) through a tweet, the company also asserts to be the initial crypto index provider to attain the remarkable feat. The company proudly stated: “CF Benchmarks is the first #crypto index provider to receive EU BMR authorization from [the FCA].”

The authorization permits CF Benchmarks to provide its indices to several regulated firms. Specifically, companies dealing in financial solutions will have free access to these indices in the EU, once the EU BMR becomes effective in 2020.

The indices can be used to issue, trade, and invest in financial products. It can also be used to describe the share of an asset in a portfolio, to quantify performance of a fund, to decide borrowing charges and contract conclusion methods. Sui Chung, CEO of CF Benchmarks explained the need for reliable benchmarks. “We are proud to be the first regulated cryptocurrency index provider to meet the EU BMR’s stringent requirements. […] Reliable and trusted benchmarks are critical to growing the cryptocurrency ecosystem as they attract more individual and institutional investors to the asset class.”


Private sector initiatives

Aventus launches Aventus Classic

Aventus, the cryptocurrency-focused blockchain protocol, unveiled Aventus Classic, a totally decentralized, open-source protocol developed to establish a transparent ticketing industry. Aventus Classic, which claims to be the only blockchain with the ability to process 100 tickets per second, has been created using the Ethereum blockchain. The system has set a new standard for the ticketing industry, with tickets exchange being done without the use of layer-2 solutions that lack decentralized trade free transaction platform.

Along with the protocol release, the company is also conducting Aventus Classic DApp Competition in association with The Satoshi Awards. Contestants are expected to develop a blockchain-powered ticketing system. The winner will receive a cash award of $15,000 worth Ether. The winning system will be used as the ticketing platform for the first Satoshi Awards event, scheduled in mid-2020. The competition, which began on September 12th, will end on November 12th, 2019.

Commenting on the partnership with Aventus, Steve Ellis, CEO, and founder of The Satoshi Awards said, “We are thrilled to have partnered with Aventus and engage the open-source community to help build our ticketing system. We are excited to see the entries start rolling in and couldn’t think of a better way to manage our tickets than through blockchain to promote trust, transparency, and innovation.”



CME Group prefers clients to hold more than the current 1,000 Bitcoin spot position limit per month

The Chicago Mercantile Exchange (CME Group), considering the rising Bitcoin futures trading volumes, prefers to allow its clients to hold twice the level of open positions than the current limit of 1,000 Bitcoin spot position per month. In this regard, CME has officially requested the US CFTC (Commodity Futures Trading Commission) to approve an increase in the permissible open positions to 2,000 spot contracts per month.

CME unveiled its cash-settled futures contract by the end of 2017, along with competitor CBOE. However, in March 2019, CBOE announced its decision to shut down futures market. As a result, CME is the only exchange to offer the product in the US. The exchange has completed 20 successful settlements so far. On average, the exchange records daily volume of 7,100 contracts. Over 1,200 traders have signed up this year to trade in Bitcoin futures.

If approved, the limit would surge to 2,000 contracts per spot month for an individual investor. As each contract is for five Bitcoins (or 5×1000 contracts=5,000 Bitcoin exposure), CFTC’s approval would increase trader’s maximum exposure to 10,000 Bitcoins (or ~100 million).

CME stated that the decision was taken “based on the significant growth and acceptance of our financially-settled CME Bitcoin futures markets, as well as our analysis of the underlying bitcoin market.”

If the CFTC permits the plan, the increase in contracts will become effective on September 30th (October 2019 contract), according to Christopher Bowen, CME managing director and chief regulatory counsel.

In the past CFTC has stated that position limits were structured to limit “excessive speculation” in commodities which forms the basis of futures product.

Disclaimer: Any financial trading analysis offered here is our opinion and is not intended as advice or direction for investors. We cannot guarantee the success of any trades made as a consequence of this article, and we encourage traders to incorporate a strong money management strategy to limit losses when they enter the markets. Please use this article as part of your own research before formulating strategies prior to trading.



Sammy is our forex expert, with over 20 years experience in the financial sector, she will be keeping you up to date with the ups and downs of currencies around the world

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