Bakkt Update: Futures and Custody User Acceptance Testing to Come up in July

By
Ponvang Bulus
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Bakkt says its Mission is to “bring digital assets into the mainstream” Bakkt, the cryptocurrency ecosystem created by Intercontinental Exchange (ICE) is primarily meant to facilitate mainstream adoption, according an update on the Bakkt Twitter page. This according to the update will be achieved by enabling transaction efficiency between consumers and merchants. The cryptocurrency platform launch which was scheduled for January 24 has been postponed due to legal and regulatory reasons. Prior to the recent postponement, the launch had been postponed twice last year, the last schedule being for December 12 2018. Majorly, the delay of the launch is due to the US Government shutdown which failed. Since the launch must be approved by the Commodity Futures Trading Commission (CFTC), it cannot go on until the government systems are back in shape. The launch has been postponed to April 2019 although no precise date has been given. A chinese billionaire by the name of Li had invested in the project in anticipation of the launch, completing the projects first funding round. By the end of 2018, Bakkt had raised up to $180 million. Apart from Li, Bakkt also vrough in institutional investors such as Boston Consulting Group, Microsoft’s venture capital arm M12 and Naspers’ fintech firm. Confirming this, Bakkt CEO Kelly Leoffler said: “Clearing firms and customers have continued to join us as we work toward CFTC approval. We made great progress in December, and we’ll continue to onboard customers as we await the ‘green light’.” The incessant postponements are of concern not just to the cryptocurrency industry but also to ICE as Bakkt was supposed to launch as a new territory for ICE at a time when a formidable competitor, the new exchange MEMX is coming into the futures market, largely to overturn ICE. For the cryptocurrency industry, Bakkt is supposed to encourage mainstream adoption which is expected to drive institutional investors to the industry. With the postponement however, the industry will have to wait until the government gives its approval. The cryptocurrency market had started improving just few days ago but with the recent postponement, there is another dip that just started today. Among the top ten cryptocurrencies, only EOS is in green at the time of writing this article. Bakkt launch will certainly promote the cryptocurrency industry as it also intends to “build the first integrated, institutional grade exchange-traded markets and custody solution for physical delivery of digital assets”, as tweeted earlier today. Will the delay worsen the market condition before it is finally done?
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The long-awaited Bitcoin trading and custody platform Bakkt may be launching soon as information from the company suggests a huge step is underway. In a Medium post today, the company said it will be engaging in user acceptance testing in July.

“In conjunction with our exchange and clearing partners at ICE, we’ll be working with our customers over the next several weeks to prepare for user acceptance testing (UAT) for futures and custody, which we expect to start in July. We’ll provide more details in upcoming posts, but we expect to use UAT to ensure that customers have time to onboard and can test the trading and custody model we’ve built to their satisfaction.”

This is part of the preparation to launch futures contracts that Bakkt has developed in collaboration with ICE Futures U.S. and ICE Clear US, which are regulation-compliant contracts designed to meet customers’ trading, transparency, and market certainty needs.

According to Bakkt, active as well as potential customers have contributed significantly in decisions concerning the design of the initial product offering with the help of the CTFC, and Bitcoin futures will be going live on a federally regulated futures exchange in few months.

This update is a great encouragement to the cryptocurrency community which has been waiting for the launch of Bakkt, a platform that will encourage institutional participation in the industry.

While this has been delayed a number of times since 2018 mainly due to inadequate preparation, information from the company earlier this year indicates the platform will be launching later this year. Although the public is tempted to doubt that, it seems Bakkt is keeping its words this time with this new progress.

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Bakkt’s parent company Intercontinental Exchange (ICE) has also applied to the New York Department of Financial Services to become a registered Bitcoin futures custody platform. ICE has also acquired DACC, a cryptocurrency custodial company, which Bakkt’s COO Adam White said was an important step in the realization of Bakkt’s launch this year.

With this in place, the cryptocurrency community can rest, assured that bakkt will be up and running soon. This, of course, will be a major boost to the industry and especially Bitcoin which is already on a bullish market move.

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