NYSE Owner Works on Bitcoin Exchange - Report

The parent company of NYSE also considers Bitcoin-based swap trading

by Marin Marinov
09 May • 2 min
In Markets

Intercontinental Exchange Inc. (ICE), the parent company of the New York Stock Exchange (NYSE), has been reportedly working on a Bitcoin trading platform, according to information on the New York Times from Monday. ICE also considers launching Bitcoin swap contracts, documents and emails obtained by the US newspaper and four anonymous participants “briefed on the effort” reveals.

The planned online trading platform will allow large investors to buy and hold Bitcoin (BTC).

“Details of the platform that Intercontinental Exchange is working on have not been finalized and the project could still fall apart, given the hesitancy among big Wall Street institutions to be closely associated with the Wild West of virtual currencies,” the NYTimes explains.

ICE entered the crypto world in January by launching virtual currency data feed that offers real-time cryptocurrency information and includes data from more than 15 cryptocurrency exchanges worldwide.

ICE is the largest stock exchange operator in the world by market volume, according to Statista. The company reported USD 1.2 billion revenue for the first quarter of 2018, up 5% year-on-year.

Swap contracts and regulation

ICE has also discussed Bitcoin-based swaps trading with several financial institutions, including banks that should support the agreements, the New York Times reveals. The contracts will be backed and secured by the planned exchange and will end with the customer owning BTC the next day.

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Putting the actual tokens in customer accounts at the end of the trade distinguishes ICE’s plan from its direct US competitors, CME Group and Cboe Global Markets, that have already enabled BTC futures.

ICE has examined Ethereum-based swaps but ruled out this option because of the unclear status of ETH.

Last month, former CFTC Chairman Gary Gensler said that Ripple (XRP) and Ethereum (ETH) are securities unlike Bitcoin (BTC). Under US legislation, if assets draw profit expectations based on a third party activity, they should be regulated as securities.

In private meetings, US regulators have indicated that they are considering defining some virtual currencies, including ETH, as securities, the New York Times revealed in April.

Intercontinental Exchange plans together with NASDAQ’s willingness to become a cryptocurrency exchange in the future come in the mid of debate between US regulators and lawmakers about the exact definition of crypto assets as securities or commodities. This distinction should make it clear which authority will regulate them. The US Commodity Futures Trading Commission (CFTC) is responsible for futures and options markets, while the Securities and Exchange Commission (SEC) enforces securities laws concerning stock exchanges.