The CME has launched two new indexes on Monday to track the price of Ether the second largest cryptocurrency.
CME Launches Ethereum Index
According to a press release, The Chicago Mercantile Exchange (CME Group) partnered with UK based digital asset exchange Crypto Facilities have launched the CME CF Ether-Dollar Reference Rate and Real Time Index, according to an announcement on May 14.
The CME CF Ether-Dollar rates will “provide a standardized reference rate and spot price index” according to the press release “the oversight of the products is managed by an independent committee that sets forth a code of conduct and meets to review the practice standards.”
According to the CME;
“The products include a spot price index called the CME CF Ether Dollar Real Time Index, known as ETH_RTI_USD, and a reference rate called the CME CF Ether Dollar Reference Rate, known as ETH_RR_USD… ETH_RTI_USD is a real time index of the US dollar price of one Ether published once per second 24 hours a day 365 days per year. This index provides real time transparency to the US dollar price of Ether. ETH_RR_USD is a daily reference rate of the US dollar price of one Ether as of 4 p.m. London time…”
Posted prices are to be based on transaction data from Kraken and Bitstamp, both major cryptocurrency exchanges.
No Plans Announced for Ethereum Futures
CME reported it has no plans to include Ethereum futures though the structure would be similar to the one already in use for their Bitcoin futures. “The focus right now is on the index itself,” said Tim McCourt, managing director and global head of equity products and alternative investments at CME. He added;
“The Ether Reference Rate and Real Time Index are designed to meet the evolving needs of the marketplace. Providing price transparency and a credible price reference source is a key development for users of Ethereum.”
The CME launched its Bitcoin Index and followed it a year later with Bitcoin Futures in December 2017. The move was a beginning to the move of institutional investors into the cryptocurrency space that continues to develop today.
Brian Quintenz, a commissioner of the Commodity Futures Trading Commission told the Consensus cryptocurrency conference on Monday that Ethereum is “something that a few exchanges have expressed interest in listing derivatives on. The decision needs to be made carefully.”
Ethereum is the second-largest cryptocurrency by market capitalization according to coinmarketcap.com. At the time of writing the Ethereum token ETH is trading up 4.6% on the day to $735.