CME Group, the Chicago-based derivatives marketplace, has teamed up with London-based cryptocurrency trading platform Crypto Facilities Ltd to launch the CME CF Ether-Dollar Reference Rate. It will provide a daily benchmark price in U.S. dollars at 4pm London time.
The pair is also launching CME CF Ether-Dollar Real Time Index, which will allow users access to a real-time Ether price in U.S. dollars.
Both the Ether Reference Rate and Ether Real Time Index will be calculated by Crypto Facilities and will be based on transactions and order book activity from two major cryptocurrency exchanges: Kraken and Bitstamp. The reference rates are available today on CME Group and Crypto Facilities websites, and will be distributed on the CME Group Market Data Platform beginning on June 4, 2018.
"The Ether Reference Rate and Real Time Index are designed to meet the evolving needs of this marketplace," said Tim McCourt, managing director and Global Head of Equity Products and Alternative Investments at CME Group. "Providing price transparency and a credible price reference source is a key development for users of Ethereum."
In October 2017, CME announced plans to launch Bitcoin futures in the fourth quarter of 2017. Since November 2016, CME and Crypto Facilities have calculated and published the BRR, which publishes the U.S. Dollar price of one Bitcoin at 4pm London time.
The existing Bitcoin Oversight Committee, consisting of CME Group, Crypto Facilities and leading industry experts, will take on the additional responsibilities for overseeing these new reference rates. The oversight committee will regularly review the methodology, practices and standards to protect the integrity of the reference rates, the two companies said in an announcement.
"Ether, the second largest cryptocurrency, experienced incredible adoption and growth in 2017, evolving into the leading blockchain for smart contracts," said Dr. Timo Schlaefer, CEO of Crypto Facilities. "We are excited to be contributing to the strong community that has developed around the Ethereum network by providing a reliable reference rate and real-time Ether-Dollar price."