CME to Launch New York Crypto Reference Rates
Posted by Colin Lambert. Last updated: February 16, 2022
CME Group has unveiled plans to launch two new reference rates for Bitcoin and Ether on February 28 – the CME CF Bitcoin Reference Rate New York (BRRNY) and CME CF Ether-Dollar Reference Rate New York (ETHUSD NY). CME says the new rates will provide a once-a-day reference rate of the US dollar price of the two digital assets, published at 4 pm New York time.
“These new reference rates are designed to meet the ever-evolving needs of participants in the digital asset space,” says Tim McCourt, global head of equity index and alternative investment products, CME Group. “In Q4 2021, the New York calculation window was the second-most traded hour for Bitcoin futures behind the London rate. As we continue to see more institutional clients use our Bitcoin and Ether futures products in active portfolios or structured products like ETFs, these New York reference rates become increasingly important as they allow market participants to more accurately and precisely assess cryptocurrency price risk with timing more closely aligned to their portfolios and regions.”
The new reference rates will complement the existing CME CF Bitcoin Reference Rate (BRR) and CME CF-Ether Dollar Reference Rate (ETHUSD RR), which provide a daily benchmark price for the two cryptocurrencies in dollars, published at 4 pm London time. The BRR and ETHUS RR will continue to serve as the benchmark rates for settlement of all CME Group Bitcoin futures, micro Bitcoin futures and Ether futures and micro Ether futures contracts, respectively.
“The CF Benchmarks team is immensely proud to be able to provide these two new versions of the groundbreaking CME CF Reference Rates for Bitcoin and Ether that synchronise with the traditional market close in North America,” says Sui Chung, CEO of CF Benchmarks. “This launch is testament to the joint commitment of CF Benchmarks and CME Group to deliver innovative solutions to investors in the digital asset space. Providing variants of two of the most trusted and liquid benchmarks in the space will serve only to further accelerate adoption for digital assets amongst institutional investors.”
Joe Hickey, global head of trading at BlockFi, adds, “CME Group’s new digital asset Bitcoin and Ether reference rates will add another risk management tool to the digital asset marketplace. When you run a 24/7 global crypto business, you need a regional end-of-day benchmark rate. This will help fill BlockFi’s institutional client demand for a liquid benchmark rate during New York hours, while also providing a new way for us to monitor the markets regionally.”