CME Group Expands Crypto Reference Rates to Asia-Pacific

CME Group, a derivatives marketplace, is introducing Bitcoin and Ethereum reference rates for the Asia-Pacific region, a further indication of the region’s expanding institutional interest in cryptocurrencies.

CME Group, a derivatives marketplace, announced on August 16 that it has partnered with CF Benchmarks, a provider of crypto indices, and will introduce two Asia-Pacific-focused crypto reference rates on September 11.

Reference rates are a credible source of a cryptocurrency’s price and, in the case of CME, are used to price settlements of cryptocurrency futures contracts.

CME Group announced that as of September 11, Asia-based crypto institutions and investors will have access to two reference rates that will track BTC and ETH.

These rates will be published daily at 4:00 p.m. Hong Kong time. CME Group has reference rates for both cryptocurrencies, but they are published at times that are more convenient for investors in New York and London.

Giovanni Vicioso, head of crypto products at CME, stated that 37% of the crypto volume has been traded during non-U.S. hours so far this year, with 11% originating from APAC.

“These APAC reference rates will allow market participants to hedge cryptocurrency price risk more accurately and precisely, with timing more closely aligned with their portfolios,” said Vicioso.

According to Matrixport’s head of research, Markus Thielen, the reference rates indicate that CME is experiencing an increase in demand from institutions requiring accurate BTC and ETH prices during the Asia trading day.

Institutions will use the daily price for investor products, which, according to him, could now see increased demand from the institutions’ end investors.

CME and CF also provide reference rates and real-time indexes for Axie Infinity Shards, Chiliz (CHZ), and Decentraland MANA, which are tokens related to the metaverse.

The firm’s other reference rates seek to provide a credible reference price by aggregating crypto spot exchange trade flows from Bitstamp, Coinbase, Gemini, and Kraken.

Such rates are utilized in the settlement of futures contracts, such as CME’s Bitcoin and Ether futures, which resolve at the London time reference rate.

Institutions are eying crypto-friendly jurisdictions like Hong Kong and Singapore, two regions that have taken significant steps to provide regulatory clarity to crypto businesses.