"Our first contracts will be physically delivered Bitcoin futures contracts versus fiat currencies, including USD, GBP and EUR. For example, buying one USD/BTC futures contract will result in daily delivery of one Bitcoin into the customer’s account."



"When it comes to traditional markets, very few investors actually sit upon stacks of stock certificates to prove what they own - and they don't want to. Their brokerage firm does all that, and will want them to do the same for their crypto assets.





So, the 30 second version is: there's laws surrounding the storage of any valuable assets. How to do this in a way that would allow major Wall Street investment houses to offer cryptocurrencies to their clients, while at the same time meeting all the legal requirements surrounding custody, has been a massive challenge."



Basically - for now Bakkt has has decided to use a method where none of this is a concern. Waiving any need for custody compliance by creating a physical asset that represents Bitcoin, and then delivering it daily to their customers - so the entire issue of custody is in the hands of the client.



A creative solution, for now. But the race is on to develop an SEC approved method of custody for cryptocurrency assets, and once this exists I expect Bakkt's daily delivery method to be replaced.



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Early last monththe announcement of the new cryptocurrency venture called "Bakkt", a company launched by the New York Stock Exchange, Microsoft, and Starbucks.Today, we're learning about the first product they will offer - Bitcoin futures, with a twist. The companyTo understand why they would be physically delivering something that represents a virtual asset such as Bitcoin, you need to understand the very complex legal framework of 'custody'. The issue is something that's held Wall Street back from offering cryptocurrency investments, until a solution that meets legal compliance is created.I explained it this way last week covering a company that believes they have a custody solution.