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CME to gauge interest for ether futures but commodity/security classification looms

17 May 2018

Speaking with Bloomberg on the sidelines of an industry conference in New York, Tim McCourt, CME's head of equity products, said that the exchange operator will test the waters to see if there is enough demand to justify the creation of an ethereum futures product, though the firm does not yet now have plans to list contracts that track the price of ether.

CME Group and Crypto Facilities Ltd have launched the CME CF Ether-Dollar Reference Rate, which will provide a daily benchmark price in USA dollars at 4pm London time, and CME CF Ether-Dollar Real Time Index, which will allow users access to a real-time Ether price in U.S. dollars.

The Chicago-based derivatives trading exchange CME Group has recently revealed it's planning on gauging user interest for an Ethereum futures product it could launch in the future, after launching a price index and benchmark for the world's second-largest cryptocurrency.

CME Group launched bitcoin futures product in December, 2017, a year after creating a bitcoin price index and a reference rate. The prices of both indexes are calculated by British Crypto Facilities on the basis of transaction data from two major cryptocurrency exchanges; Kraken and Bitstamp. As the name indicates, the Ether Real-Time Index provides real-time Ether price. "Providing price transparency and a credible price reference source is a key development for users of Ethereum". As covered, Crypto Facilities has already launched Ethereum futures contracts.

The reference rate, known officially as the CME CF Ether-Dollar Reference Rate, will provide daily price benchmarks in USA dollars every day at 4 p.m. London time, while the real-time index, officially known as the CME CF Ether-Dollar Real Time Index, will allow users to access the price of Ether in dollars in real time. At press time, the cryptocurrency is trading at $8,315.

The pre-existing Bitcoin Oversight Committee, which includes experts from CME Group and Crypto Facilities, will oversee the various aspects of offering these new reference rates to the public. They will "regularly review the methodology, practices and standards used to protect the integrity of the reference rates", according to the release.

CME to gauge interest for ether futures but commodity/security classification looms