The official report of the Chicago Mercantile Exchange Group expressed that, “Given increasing client interest in evolving cryptocurrency markets, we have decided to introduce a bitcoin futures contract.”
The Chief Executive Officer and Group Chairman, Terry Duffy also stated that,
“As the world’s largest regulated FX marketplace, CME Group is the natural home for this new vehicle that will provide investors with transparency, price discovery and risk transfer capabilities.”
Duffy disclosed to CNBC that he is exceptionally certain that CME’s application will be acknowledged pending the US Commodity Futures Trading Commission. He finished up by saying that, “They understand our application and they understand our model very, very well”.
The contract would be based on the CME CF Bitcoin Referance Rate (BRR). While the settlement of the bitcoin futures contract would be done in cash, the BRR will only act as a daily settlement price of USD price of the cryptocurrency.
The CME CF Bitcoin Referance Rate was launched through the London based digital trading exchange named Crypto Facilities Ltd in November 2016. Dr. Timo Schlaefer, the Chief Executive Officer of Crypto Facilities Ltd detailed that,
“The BRR has proven to reliably and transparently reflect global bitcoin-dollar trading and has become the price reference of choice for financial institutions, trading firms and data providers worldwide.”
After this initiative, the duo also published the Bitcoin Real Time Index (BRTI), which aims at providing transparency in the bitcoin market.