As a researcher with a background in fintech and cryptocurrencies, I believe that Brad Garlinghouse’s perspective on the new XRP reference rate by CME Group and CF Benchmarks is an important development for the adoption of XRP. The creation of trusted benchmark reference rates is indeed a crucial step towards institutional investment in crypto assets.
Brad Garlinghouse, the CEO of Ripple Labs Inc, the blockchain payments company, views the recent initiation of an XRP reference rate (index) by CME Group Inc and CF Benchmarks as a significant move in boosting the use of XRP.
The Ripple executive pointed out that creating institutional-grade crypto products begins with establishing reliable benchmark references. Notably, CME Group has taken this approach with XRP and Internet Computer (ICP). They accomplish this in partnership with CF Benchmarks, a company specializing in cryptocurrency benchmark indices.
CF Benchmarks and CME Group XRP Index
Thursdays saw CME Group, a well-known derivatives exchange, make an announcement via X about the introduction of new reference rates for XRP and Internet Computer. These rates aim to offer the US dollar value for each digital asset.
Starting July 29, CF Benchmarks will calculate and release non-tradable reference rates and indices on a daily basis.
According to CME Group, the new benchmarks aim to deliver comprehensive pricing information to a wide array of market players, enabling them to effectively assess the value of their portfolios or construct complex financial instruments. As expressed by Giovanni Vicioso, Global Head of Cryptocurrency Products at CME Group, this development is expected to significantly enhance transparency and accuracy in the valuation process.
As an analyst, I can say that our offering includes pricing data for 24 different cryptocurrencies within our CME CF References Rates and Real-Time Indices. This covers over 93% of the total market capitalization of investable cryptocurrencies, enabling clients around the world to effectively manage their risk.
Similar to current CME CF Benchmark reference rates and real-time indices, the new benchmarks will be calculated using pricing information from several prominent cryptocurrency exchanges and trading platforms. These selected exchanges are integrated into the CME CF Benchmark collection of reference rates and real-time indices. At least two of these exchanges – Bitstamp, Coinbase Global Inc (NASDAQ: COIN), Gemini, itBit, Kraken, and LMAX Digital – will be included in this group.
Just like the existing benchmarks in the CME CF Single Asset Series, the newly introduced reference rates and indices will be computed and managed with the same meticulous care. This is done to maintain the same degree of trust and reliability that users have come to expect when dealing with these new financial assets.
Good Break for XRP
The distinctive XRP reference rate is a significant advantage for the coin that has been overshadowed by the protracted Ripple-vs-SEC lawsuit with the US SEC. Notably, CF Benchmarks views this offering as a means to foster the growth and development of this asset. The aim is for investors to diversify their activities across various cryptocurrencies, eventually incorporating XRP into their portfolios.
Until the Ripple lawsuit reaches a resolution, institutional investors may gain increased trust in XRP. The outcome of this case could potentially pave the way for the development of an XRP Exchange Traded Fund (ETF).
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2024-07-12 13:39