CME Group CEO Terry Duffy has suggested that the derivatives giant is looking into launching its own cryptocurrency.
In response to a question from Morgan Stanley’s Michael Cyprys during the company’s recent earnings call, Duffy confirmed that the firm is exploring “initiatives with our own coin 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 carefully reviews various forms of margin.
“So if you were to give me a token from a systemically important financial institution, I would probably be more comfortable than maybe a third or fourth 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 coin.”
The company is already working on a “tokenized cash” solution with Google that is due out later this year and will involve a custodian bank facilitating transactions. The “proprietary coin” that Duffy referred to appears to be another token that the company could “potentially put on a decentralized network that other of our industry participants can use.”
CME declined to clarify whether this “coin” would function as a stablecoin, settlement token or something else entirely when asked by CoinDesk.
But if such an initiative goes through, the consequences are significant.
While CME Group has previously flagged tokenization as a general area of 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 firm is set to launch 24/7 trading for all crypto futures in the second quarter of the year, and is also set to soon offer cardano, chainlink and stellar futures contracts.
CME’s average daily crypto trading volume hit $12 billion last year, with its micro-ether and micro-bitcoin futures contracts top performers.
The 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 Base via its so-called JPM Coin (JPMD), quietly rewiring how Wall Street moves money.
