CME Group CEO Terry Duffy has suggested that the derivatives giant is considering 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 was exploring “initiatives with our own coin that we could potentially put on a decentralized network.”
The comment was brief and responded to a question about the role of symbolic guarantees. In response, Duffy first pointed out that the world’s largest derivatives exchange was carefully examining different forms of margining.
“So if you gave me a token from a systemically important financial institution, I would probably be more comfortable than a third or fourth tier bank trying to issue a token to get margin,” Duffy said. “Not only are we considering tokenized species, but we are also considering different initiatives with our own coin.”
The company is already working on a “tokenized cash” solution with Google that is expected to be released later this year and will involve a custodian bank facilitating transactions. The “own coin” that Duffy referred to appears to be a different token that the company could “potentially set up a decentralized network for others in our industry to use.”
CME declined to clarify whether this “coin” would function as a stablecoin, a settlement token, or something else when asked by CoinDesk.
However, if such an initiative comes to fruition, the implications are significant.
While CME Group had previously flagged tokenization as an area of general interest, CEO Terry Duffy’s comments this week mark the first time the exchange has explicitly floated the concept of a proprietary CME-issued asset running on a decentralized network.
The company is expected to launch 24/7 trading for all crypto futures in the second quarter of the year, and is also expected to offer Cardano, Chainlink, and Stellar futures soon.
CME’s average daily crypto trading volume reached $12 billion last year, with its micro-ether and micro-bitcoin futures contracts being the best performers.
This launch would not make CME the first traditional financial giant to launch its own token. JPMorgan recently rolled out tokenized deposits on Coinbase’s layer 2 blockchain through its so-called JPM Coin (JPMD), quietly rewiring the way Wall Street moves money.
