With two exchanges set to begin offering bitcoin futures this month, a CFTC official said on Wednesday that government regulation aims to preserve the integrity of the contracts.
"The exchanges are looking at the underlying cash contract to make sure it's not manipulated," Andrew Busch, chief market intelligence officer at the Commodity Futures Trading Commission, told CNBC's "Squawk Box." "Our role as a derivatives regulator is to make sure the futures contract it's not manipulated. We're going to do that for sure."
Bitcoin has been hitting record high after record high this year. But trading in the crytocurrency has also been highly volatile, with double-digit percentage swings on a daily basis rather commonplace.
The CME Group and Cboe Global Markets, the companies behind two major futures exchanges, hope to capitalize on the interest and apprehension surrounding bitcoin by offering products with a layer of government regulation. But Busch at the CFTC, which has approved plans by the exchanges, did warn the "underlying cash market is not regulated at this point."
Cboe bitcoin futures are set to begin trading on Sunday. The CME contracts are slated to launch on Dec. 18. Nasdaq, meanwhile, plans to launch its own bitcoin futures as early as the second quarter of 2018.
Besides a market value, bitcoin is also a digital currency that is created by so-called miners with powerful computers online. It has no central authority, and the transactions are recorded in an anonymous public log called the blockchain.
"This is a unique animal unlike any commodity we've looked at before," said Busch.
The merits of bitcoin as a commodity — some have likened it to gold — and as a currency have been debated widely by bankers and tech investors alike.
For example, JPMorgan Chairman and CEO Jamie Dimon has repeatedly warned that bitcoin is a "fraud." But on the other side of that argument, Cameron and Tyler Winklevoss, the twins who famously battled Mark Zuckerberg over the origins of Facebook, were early investors and recently became the first well-known bitcoin billionaires.
Bitcoin surged past the $12,000 level in early Wednesday trading, according CoinDesk which runs a main crytocurrency exchange. Prices were up nearly 1,600 percent in the past 12 months.