CME Group CEO Terry Duffy has suggested that the derivatives giant is exploring launching its own cryptocurrency.
In response to a question from Morgan Stanley’s Michael Cyprys during the company’s latest earnings call, Duffy confirmed that the company is exploring “initiatives with our own currency that we could potentially put on a decentralized network.”
The comment was brief and came in response to a question about the role of tokenized collateral. In response, Duffy first noted that the world’s largest derivatives exchange is carefully reviewing different forms of margin.
“So if I was given a token from a systemically important financial institution, I would probably feel more comfortable than maybe a third or fourth tier bank trying to issue a token for margin,” Duffy said. “We’re not just looking at tokenized cash, we’re looking at different initiatives with our own currency.”
The company is already working on a “tokenized cash” solution with Google that will come out later this year and will involve a depository bank facilitating transactions. The “coin itself” Duffy references appears to be a different token that the company could “potentially put on a decentralized network for use by other participants in our industry.”
The CME declined to clarify whether this “coin” would function as a stablecoin, a settlement token, or something else entirely when asked by CoinDesk.
However, if such an initiative is carried out, the implications will be significant.
While CME Group has previously flagged tokenization as an area of general interest, CEO Terry Duffy’s comments this week mark the first time the exchange has explicitly raised the concept of a CME-issued proprietary asset running on a decentralized network.
The company will launch 24/7 trading for all crypto futures in the second quarter of the year, and will soon also offer cardano, chainlink and stellar futures contracts.
CME’s average daily cryptocurrency trading volume reached $12 billion last year, with its micro-ether and micro-bitcoin futures contracts being the best performers.
The launch would not make CME the first traditional financial giant to launch its own token. JPMorgan has recently implemented tokenized deposits on Coinbase’s layer 2 blockchain through its so-called JPM Coin (JPMD), quietly reconfiguring the way Wall Street moves money.
