By
Temitope Olatunji
April 26th, 2024
This strategic collaboration aims to provide market participants with accurate and timely pricing information, fostering greater transparency and confidence in the evolving digital asset space.
The world’s leading derivatives platform, CME Group Inc (NASDAQ: CME) has partnered with CF Benchmarks to launch Bitcoin (BTC) and Ethereum (ETH) reference rates, cementing crypto’ growing significance in the Asia-Pacific (APAC) region.
CME Group stated in a press release that the two new reference rates, CME CF Bitcoin Reference Rate APAC and the CME CF Ether-Dollar Reference Rate APAC will go live on September 11. These reference rates will offer a once-a-day snapshot of the US dollar price of Bitcoin and Ethereum, respectively, at 4 p.m. Hong Kong/Singapore time.
Giovanni Vicioso, Global Head of Crypto Products at CME Group, emphasized the importance of these reference rates in the context of the crypto ecosystem. “These new reference rates are designed to meet the ever-evolving needs of global participants in the growing digital asset space,” Vicioso stated.
It is worth mentioning that CME Group and CF Benchmarks have earlier solidified their partnership by introducing three new Metaverse reference rates.
The three Metaverse reference rates introduced features Axie Infinity (AXS), Chiliz (CHZ), and Decentraland (MANA). These tokens are key players in the metaverse landscape, each contributing unique aspects to the virtual realm. With their inclusion in reference rates, CME Group and CF Benchmarks acknowledge the increasing influence and potential of the metaverse space.
CME Group in APAC Market: Core Benefits
The introduction of Bitcoin and Ethereum reference rates in the APAC region is a significant step forward for the cryptocurrency ecosystem. APAC has been at the forefront of crypto adoption and innovation, with countries like Japan, South Korea, and Singapore leading the way.
Vicioso pointed out that 37% of crypto volume at CME Group year-to-year has been traded during non-US hours, with a noteworthy 11% of trades originating from the APAC region. Therefore, providing accurate reference rates tailored to this region’s trading hours and market dynamics is essential for attracting institutional investors and further legitimizing the crypto market.
One of the primary advantages of these reference rates is the potential for improved risk management and hedging strategies. Institutional investors, who frequently require precise and trustworthy data, will be able to make more informed judgments concerning their Bitcoin exposure.
Additionally, these rates are anticipated to significantly impact the risk management methods of institutions entering the crypto space, improving their ability to mitigate possible market swings. This partnership couldn’t come at a better time as the crypto market is expanding rapidly, with popular usage increasing as complemented by growing institutional interest.
Furthermore, the introduction of these reference rates contributes to the ongoing process of legitimizing the crypto market within the regulatory framework. As governments and financial watchdogs increasingly engage with the crypto space, these reference rates can be seen as a responsible step towards meeting regulatory expectations.