CME Group and Google Set to Introduce Tokenized Cash Coin for Crypto Collateral This Year

Highlights:

• CME Group has disclosed an initiative to launch tokenized cash coin for crypto in partnership with Google and another depository bank.
• The company’s CEO confirmed that the crypto collateral project could launch later this year, as work has already begun to roll it out.
• The CEO also noted that CME will carefully assess digital assets before accepting them as collateral options.  

CME Group’s Chairman and Chief Executive Officer (CEO) Terrence Duffy has revealed plans to roll out a tokenized cash product for crypto collateral in collaboration with Google. The Chairman shared the update during the company’s earnings call on February 4. Duffy’s statement was in response to some questions from Michael Cyprus of Morgan Stanley. During the meeting, Cyprus asked about tokenized collateral and how CME views different digital forms of money used for margin. 

Additionally, Cyprus wanted to know the benefits and drawbacks of using stablecoins, tokenized bank deposits, or tokenized money market funds. He also asked whether CME would accept all of them and whether they would be treated differently. He concluded by asking what steps the exchange is taking this year to bring collateral on-chain.

Duffy Outlines How CME Group and Google Plan to Launch Tokenized Cash Coin

In response, Duffy noted that the questions were complex and hard to cover in a short answer. However, he still shared how CME is approaching it. According to the CEO, CME is already working on a tokenized cash project that will roll out later this year. The project will launch in partnership with Google and another depository bank that will handle the transactions. 

Meanwhile, the tokens that CME will accept as collateral will depend on some key factors. These include the token’s issuer and risks associated with such tokens. CME will scrutinize each token before accepting it. By carefully assessing each token, the company will also decide whether it would need to apply a large discount to protect itself. The CEO emphasized that CME will not accept assets it does not fully understand, as the company is focused on protecting the business and broader market.  

Duffy stated:

CEO Hints at Developing CME’s Unique Digital Coin

Duffy emphasized that CME is currently reviewing different forms of digital margin but won’t accept anything that adds uncertainty or risk. Beyond tokenized cash, CME intends to explore other ideas, including the possibility of launching its own digital coin that could run on a decentralized network for use by industry participants.

The CEO added:

Separately, Crypto2Community reported that CME Group plans to launch 24/7 crypto futures and options trading later this year. The move was in response to the rapid surge in institutional demand for round-the-clock access. With the new trading schedule, CME wants customers to manage common crypto-related risks at any time of the day, eliminating the restrictions on weekend trading.