CME Explores Cryptocurrency Derivatives Contracts in Patent Filing

Derivatives large CME has developed a system for delivering digital currencies tied to spinoff contracts, patent paperwork present.

The US Patent and Trademark Office (USPTO) published CME’s utility on 4th May, entitled “System for Physically Delivering Virtual Currencies”. At its coronary heart, the idea envisions delivering cryptocurrency holdings tied to a specific contract with out the clearing get together truly taking possession.

The agency is already recognized to be wanting, no less than conceptually, on the concept of derivatives contracts for bitcoin miners. As beforehand reported by CoinDesk, the proposed derivatives would allow miners to extra successfully hedge in opposition to the ever-increasing problem of mining (the energy-intensive course of by which new transactions are added to the blockchain), in addition to the declining worth of their mining .

The new utility signifies that CME is further merchandise tied to the tech, with the agency explaining:

“A clearing counter-party could facilitate physical delivery of virtual currency contracts by instructing the sellers of expiring contracts to transfer the virtual currencies directly to the clearing counter-party, and the clearing counter-party would then transfer the virtual currencies to the buyers.”

That CME can be wanting into this space is probably unsurprising. Last November, it launched a pair of bitcoin price benchmarks, which might ostensibly function a part of the infrastructure for any merchandise it could facilitate.

What’s extra, the agency’s executives have beforehand discussed the prospects of monetary merchandise round digitized belongings.

“In reality, a number of the most enjoyable areas to discover are on the intersection of digital belongings and tokenized fiat and tokenized commodities,” CME govt director and digitization lead Sandra Ro stated throughout an occasion final November.

Ro is one in every of three inventors listed on the patent utility, together with digitization director and expertise architect Ryan Pierce, and Mansoor Ahmed, who serves as director of clearing for the agency.

CME picture through Shutterstock

Disclosure: CME Group is an investor in Digital Currency Group, of which CoinDesk is a subsidiary.