CME & CF Introduce APAC Crypto Reference Rates
CME Group and CF Benchmarks have announced a groundbreaking collaboration. The world’s premier derivatives marketplace, CME Group, and CF Benchmarks, a trailblazing provider of cryptocurrency benchmark indices, have unveiled their strategic plan to introduce two distinct APAC-focused reference rates for bitcoin and ether. The launch is set to take place on September 11, with these rates poised to offer a daily reference point for the U.S. dollar value of these digital assets, disseminated at 4 p.m. Hong Kong and Singapore time.
CME CF APAC Bitcoin and Ether Reference Rates launch Sept. 11, providing daily prices at 4 p.m. HKT and SGT and complementing existing London and New York time rates. https://t.co/j3r7yCfe45 pic.twitter.com/6tOadpk51M
— CME Group (@CMEGroup) August 17, 2023
CME-CF Reference Rates
The brainchild of this partnership is the CME CF Bitcoin Reference Rate APAC (BRRAP) and the CME CF Ether-Dollar Reference Rate APAC (ETHUSD_AP). Designed with precision and tailored to the nuanced requirements of the global cryptocurrency community, these reference rates are anticipated to provide a more accurate avenue for market participants to hedge their cryptocurrency-related price exposure. Notably, in 2023, 11% of trades in this realm hailed from the Asia-Pacific (APAC) region, signalling the growing significance of this market geography.
Giovanni Vicioso, the Global Head of Cryptocurrency Products at CME Group, emphasized the dynamic nature of the cryptocurrency sphere. He noted, “As we continue to see more institutional clients use our Bitcoin and Ether futures products in active portfolios or structured products like ETFs, these APAC reference rates will allow market participants to more accurately and precisely hedge cryptocurrency price risk with timing more closely aligned to their portfolios.”
APAC Variants
This strategic move is a natural progression, building on the foundation of existing reference rates. The CME CF Bitcoin Reference Rate (BRR) and CME CF Ether-Dollar Reference Rate (ETHUSD_RR) have already established themselves as benchmark rates for the settlement of various CME Group cryptocurrency futures contracts. The new APAC variants of these reference rates will be calculated and administered with the same rigorous standards that have bolstered investor and institutional confidence in crypto financial products.
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Sui Chung, the CEO of CF Benchmarks, acknowledged the surging adoption of cryptocurrencies and highlighted the pivotal role their benchmarks play in facilitating the introduction of regulated financial products in Asian markets. These benchmarks, including the forthcoming APAC versions, are poised to fortify the bridge between traditional financial markets and the burgeoning world of cryptocurrencies.
