Global Derivatives marketplace CME Group today announced that it will collaborate with digital assets trading platform, Crypto Facilities Ltd, to develop two new products which are being planned for a Q4 2016 launch. The news comes less than a week after the group reported record financial results for Q1 2016.
The products are CME CF Bitcoin Reference Rate (BRR), which will provide a final settlement price in U.S. dollars at 4 pm London time on each trading day, and CME CF Bitcoin Real Time Index (RTI), which will allow users real-time access to bitcoin prices.
The BRR will aggregate the trade flow of major bitcoin spot exchanges during a specific calculation window into a once-a-day, transparent reference rate of the U.S. dollar price of bitcoin. The RTI, meanwhile, will be calculated by Crypto Facilities and will be based on global demand to buy and sell bitcoin aggregated into a consolidated order book. It will reflect the current market price of bitcoin in U.S. dollar terms and will be published approximately once every second.
The products will allow bitcoin traders and other users to rely on a credible reference rate price source.
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Reference prices will be calculated based on pricing data received from several bitcoin exchanges and trading platforms including Bitfinex, Bitstamp, Coinbase, Genesis Global Trading, itBit and Kraken.
Sandra Ro, Executive Director and Digitization Lead at CME Group commented: “These products are designed to allow bitcoin traders, companies and other users to rely on a credible reference rate price source. We are proud to lead the way for the industry as digital assets develop.”
Dr. Timo Schlaefer, co-founder and CEO, Crypto Facilities, added: “The availability of robust reference prices with independent oversight is key to the professionalization of bitcoin trading and further establishes digital assets as a new asset class”.
The two companies, together with Imperial College London, will serve as core members of an oversight committee responsible for overseeing the BRR and will be responsible for developing a code of conduct for participants. They will periodically review the practices and standards followed in the determination process to protect the BRR’s integrity.