Bitcoin Futures are coming to Japan after one of the country’s largest exchanges announced plans for the same. Tokyo Financial Exchange is in the process of creating a working group that will lay the foundation for bitcoin futures next year.
Bitcoin Futures Legislation
For the listing of cryptocurrencies in Japan, a number of changes in the nation’s securities laws will have to come into play. For starters, the country’s Financial Instruments and Exchange Act will have to recognize cryptocurrencies as financial products.
Creation of a working group usually marks the first step towards the drafting of new legislation in such matters.
“To achieve that, we will launch this working group to study various aspects, including bitcoin’s present status, its outlook, and what form it will take root in Japan’s society,” said Tokyo Financial Exchange Chief Executive Officer, Shozo Ohta.
The proposed new legislation is not expected to face any major hurdles given Japan’s stance on cryptocurrencies. The country has already shown its receptiveness towards cryptocurrencies by unveiling laws that recognize bitcoin as legal means of exchange. The country’s financial exchanges also account for nearly half of global bitcoin trading volume.
U.S Bitcoin Futures Listing
The U.S is already preparing for Bitcoin future derivatives as early as next week. Cboe Global Markets will launch its futures derivatives over the weekend as it seeks to give hedge funds and institutional investors an opportunity to take advantage of big swings in the sector. CME Group will launch its futures derivatives on the 18th of December with NASDAQ planning its launch in the summer of 2018.
Bitcoin Futures Warnings
Talk of the Futures contract has already had a significant impact on bitcoin price seen by its recent rally from $11,000 to record highs of $16,000 and showing no signs of slowing down. Amidst the hype, Wall Street banks have already started to cry foul about the upcoming bitcoin futures given the rising prices
The Futures Industry Association which represents some of the largest derivatives brokerages has warned against rushing bitcoin futures contracts without weighing the risks. The Association members have reservations about the reliability of prices underlying the upcoming contracts.
“A more thorough and considered process would have allowed for a robust public discussion among clearing member firms, exchanges and clearing houses,” FIA in a statement.
The U.S Federal Reserve has also warned against dabbling in cryptocurrencies as it could pose significant dangers to financial stability. With the consistent increase in price, fears of a bubble burst have also increased.
Disclaimer: This article should not be taken as, and is not intended to provide, investment advice. Please conduct your own thorough research before investing in any cryptocurrency.
Image courtesy of ibz_omar via Flickr
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