On the eve of one of the most anticipated events – the launch of futures on bitcoin, the largest banks are not enthusiastic about the prospects of providing such services to clients. In particular, Bank of America Merrill Lynch (BAML), Citigroup Inc. (Citi) and the Royal Bank of Canada (RBC) declare that they refuse to provide clients with access to these futures.
According to banks, the volatility of bitcoin brings into question the brokerage to liability. Traditional markets need «financial priests», who are directing the laity to the promised land – the broker – but this broker could be «on the hook» for bad bets related to the volatility of bitcoin.
RBC, BAML and Citi – banks for decades claiming its reputation weighted steps, and lobbying the government to regulate competition by creating barriers to entry – as a result they find it difficult to join the flexible world of decentralized registries and peer-to-peer networks.
It all comes down to risk and responsibility of contractor: if the client is unable to cover the transaction, the likelihood that the basic insurance product will not make it totally great. Pricing bitcoin almost uncontrollable, and it is, at least, is troubling for the fate of the experiment in futures.
The crypto currency exchange does not inspire confidence when it comes to large scale. They also have to set limits.
«Goldman Sachs is the largest futures broker in the United States. He is still deliberating on its participation in the development of the cryptocurrency market. The Bank will decide who will trade futures contracts on the bitcoin on an individual basis,» explains akin Ogele (Akin Oyedele).
«Interactive Brokers Group will offer clients access to futures on THEIR bitcoin, but only for so-called «long» traders holding a bet on the rise in the price of bitcoin,» the company’s CEO Thomas Peterfi.
Similar concerns about cryptocurrency derivatives expressed in an open letter to the futures industry Association (FIA). In a letter to the CFTC, its President Walt Lukken (Walt Lukken) also States that the launch chemosensitizing futures contracts on the bitcoin CFTC allowed is too risky move. He proposes to hold a wide public discussion among major investors and market players and to determine how should be regulated by similar mechanisms.
Of course, these steps will not affect the launch of the futures, but toning down the optimism of the traders and some reduce the inflow of liquidity to the market.