Derivatives market CME Group is launching bitcoin (BTC) and ethereum (ETH) reference rates for the Asia-Pacific region, another sign of growing Asian institutional interest in cryptocurrencies.
August 16, Derivatives Market CME Group explain It partnered with cryptocurrency index provider CF Benchmarks to launch two Asia-Pacific-focused cryptocurrency reference rates on Sept. 11.
Reference rates are used as a reliable source of cryptocurrency prices and, in the case of CME Group, are used for price settlement of cryptocurrency futures contracts.
From Sept. 11, crypto institutions and investors in Asia will have access to two reference rates tracking BTC and ETH, which will be published daily at 4 p.m. Hong Kong time, CME Group said.
CME Group has existing reference rates for the two cryptocurrencies, but sometimes publishes rates that are more suitable for investors in the New York and London time zones.
Launched on September 11, the CME CF APAC Bitcoin and Ethereum Reference Rates provide daily prices at 4pm Hong Kong time and Singapore time, and complement existing London and New York time rates. pic.twitter.com/6tOadpk51M
— CME Group (@CMEGroup) August 17, 2023
Giovanni Viciioso, CME’s head of crypto products, said that so far this year, 37 percent of its cryptocurrency trading volume has occurred outside the U.S., with 11 percent of that coming from the Asia-Pacific region.
“These Asia-Pacific reference rates will allow market participants to more accurately hedge cryptocurrency price risk, with timing more aligned with their portfolios,” Viciioso said.
Markus Thielen, director of research at Matrixport, told Cointelegraph that the reference rates show that the CME has seen increased demand from institutions that require accurate BTC and ETH prices during the Asian trading day.
Institutions will use the daily price of investor products – he thinks there may be greater demand from end-investors in these institutions now.
related: From the U.S. to Japan, Regulators Embrace Cryptocurrencies
CME and CF also have reference rates and real-time indices for Metaverse-related tokens Axie Infinity Shards (AXS), Chiliz (CHZ) and Decentraland (MANA).
The company’s other reference rates aggregate cryptocurrency spot exchange flows from Bitstamp, Coinbase, Gemini and Kraken to provide a credible reference price.
Such rates are used for the settlement of futures contracts, including CME Group’s bitcoin and ethereum futures products, which are settled at their London time reference rate.
Institutions have been eyeing crypto-friendly jurisdictions such as Hong Kong and Singapore, which have taken major steps to provide clear regulation for cryptocurrency businesses.
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