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Digital asset innovation & progress report

Digital asset innovation & progress report

Introducing our board as we build digital asset infrastructure

With ongoing reports of crypto market manipulation and security concerns, the need for the solutions we’re building at Bakkt is more critical than ever. It illustrates why regulated custody and market-based solutions for digital assets are at the core of our work to address risks that have discouraged many from interacting with digital assets. Security, infrastructure and regulatory clarity are cornerstones for building trust, and ultimately to help this technology serve people around the world.

We are charting a new course and it requires significant work, including by our Board, so I want to recognize our members. Chairing the board is Tom Noonan, a cyber expert and founder of numerous cybersecurity companies, including Internet Security Systems (IBM), JouleX (Cisco) and Endgame. Also joining me on the board are Jeff Sprecher, the Founder, Chairman and CEO of ICE and Chairman of the NYSE; Akshay Naheta, Managing Partner at Softbank; and Sean Collins, Managing Partner at Goldfinch Partners.

Over the last year, we’ve worked closely with the Commodity Futures Trading Commission (CFTC) on an extensive process to obtain regulatory approval for the launch of our physically delivered bitcoin futures. While we’re not yet able to provide a launch date, we’re making solid progress in bringing the first physical delivery price discovery contracts for bitcoin to the U.S., where price formation will occur in federally regulated, transparent markets.

The challenging environment for crypto has reinforced the need for well-functioning derivatives markets and risk management tools. It has also helped shape our product set, as has valuable feedback from customers and regulators. As our COO Adam White noted on a recent industry panel, the pace of approvals is set by regulators and our role is to work constructively to advance the process.

Our planned Bakkt bitcoin futures contracts will be listed and cleared on CFTC-regulated exchange and clearing infrastructure, ICE Futures US and ICE Clear US, where global market participants already transact. The price discovery function in these new physical delivery markets should contribute to building confidence in bitcoin prices. Similarly, just as digital asset custody is at the core of Bakkt’s infrastructure development, secure custody is at the heart of our physical delivery bitcoin futures contracts. We’ll share more about our custody platform shortly, as we work to set a new standard in digital asset security.

New product launches require solving for unknown variables, and I’ve seen first-hand that addressing these challenges can help clear the path for healthy, long-term growth. These include innovations that were considered controversial at the time, such as electronic trading for derivatives markets and central clearing for credit default swaps. These solutions ultimately improved markets and shifted them toward regulation, which strengthened and grew these products.

We continue to work with regulators to address the emerging global landscape for digital assets like cryptocurrencies, loyalty and rewards points, gift cards and gaming assets. As investment continues, the intersection of technology and finance will require ongoing engagement as new applications emerge. Digital assets and distributed ledger technology have significant, positive potential with proper collaboration across tech, industry and regulators. Our team at Bakkt is proud to take a leadership role in this work and in supporting the evolution of digital assets in the U.S. and across the globe.

This does not constitute, and should not be construed as, investment advice or a recommendation to buy, sell, or otherwise transact in any investment, including any of the product(s) mentioned herein, or an invitation, offer or solicitation to engage in any investment activity. This information is provided solely on the basis that you will make your own investment decisions, and Bakkt does not take account of any investor's investment objectives, particular needs, or financial situation. It is strongly recommended that you seek professional investment advice before making any investment decision.