Goldman Sachs Plans to Clear Bitcoin Futures When They Go Live

Goldman Sachs Group Inc. plans to clear bitcoin futures contracts for certain clients when the derivatives go live in coming days, according to a person with knowledge of the firm’s plans.

Goldman Sachs, one of the largest firms helping clients buy and sell futures contracts, will act in an agency capacity and won’t serve as a market-maker or build inventory in the derivatives, said the person, who asked not to be identified talking about the plans. The decision to clear client trades will be made on a case-by-case basis, the person said.

“Given that this is a new product, as expected we are evaluating the specifications and risk attributes for the bitcoin futures contracts as part of our standard due diligence process,” Tiffany Galvin, a spokeswoman for the bank, said in an emailed statement.

Bank of America Corp. and Citigroup Inc. won’t immediately offer clearing of the products when they start trading, people briefed on those lenders’ decisions said. The Wall Street Journal reported the banks’ decisions earlier Thursday.

The choices come days before Cboe Global Markets Inc., one of the world’s biggest regulated exchanges, begins trading bitcoin futures on Dec. 10. A competing product offered by the CME Group Inc. will launch Dec. 18. Bank of America isn’t currently planning to engage when the CME begins offering trading, one of the people said.

The products are coming online despite worries from some that the risks of trading cryptocurrency derivatives haven’t been fully thought through. This week, the Futures Industry Association — a group of major banks, brokers and traders — said the contracts were rushed without enough consideration of the risks. All three firms are members of the FIA.

Goldman Sachs Chief Executive Officer Lloyd Blankfein said last month that it’s too early for his bank to need a bitcoin strategy and that he doesn’t consider the digital currency to be a store of value. Blankfein said in the Bloomberg Television interview that he felt no urgency for his firm to develop a plan for dealing with bitcoin given its volatility.

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