During the February CME earnings call, CEO Terry Duffy mentioned the possibility of the CME creating its own coin, likely a stablecoin. In yesterday’s earnings call Suzanne Sprague, COO and Global Head of Clearing, said it was starting to speak to vendors and engage with regulators to issue a stablecoin. The CME aims to advance the plans this year, but cannot pin down a timeline without regulatory approval.
The stablecoin would complement its plans to enable bank-based tokenized cash to meet 24/7 margin requirements through its initiative with Google Cloud Universal Ledger (GCUL). Last month BMO was announced as a settlement bank for the project, and Sprague confirmed plans to start testing with clearing members with a view to going live later this year. Responding to a question about tokenized Treasuries for collateral, Sprague said, “We will continue to explore what we could do together with FICC, as well as other initiatives that we’re pursuing at CME.” She added that the CME is also exploring other assets that could be used as tokenized collateral. Tokenization is not the only avenue to collateral efficiency. The SEC and CFTC recently approved cross margining between FICC and CME which will go live on 30 April.
Perpetuals are a hot topic with CFTC Chair Michael Selig saying in March that he is planning rulemaking. This has spurred plenty of activity including the announcement last week that Kraken parent Payward is acquiring Bitnomial, a derivatives venue with CFTC licenses for exchange, clearing and brokerage. Responding to questions about perpetuals, CME CEO Terry Duffy expressed displeasure on several fronts. He believes that current US legislation does not envision contracts without an end date. Duffy views perpetuals as inappropriate for hedging. And he was particularly irked by the recent S&P 500 license for perpetuals granted by S&P Dow Jones Indices to onchain derivatives provider Trade[XYZ], which operates on Hyperliquid.
Article continues …
Want the full story? Pro subscribers get complete articles, exclusive industry analysis, and early access to legislative updates that keep you ahead of the competition. Join the professionals who are choosing deeper insights over surface level news.
