CME Group to pilot tokenization technology for capital market efficiency

US derivatives trade operator CME Group is piloting options for tokenized belongings utilizing Google Cloud Common Ledger (GCUL), a brand new distributed ledger that was designed for conventional monetary establishments.

In accordance with a March 25 announcement, CME has already begun integrating GCUL to enhance capital market effectivity and wholesale funds. 

CME Group chairman and CEO Terry Duffy mentioned GCUL may “ship important efficiencies for collateral, margin, settlement and charge funds because the world strikes towards 24/7 buying and selling.”

The announcement didn’t present particular particulars about which belongings could be tokenized. CME Group and Google Cloud will start testing the know-how with market individuals in 2026.

Earlier than the March 25 announcement, there have been no particulars about GCUL. Nonetheless, Google Cloud has been increasing into blockchain know-how for a number of years, starting in 2018 by including Bitcoin blockchain knowledge to its knowledge warehouse. 

In 2023, Google Cloud added 11 blockchains to its knowledge warehouse. They included Ethereum, Arbitrum, Avalanche and Optimism. 

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Tokenization goes mainstream

Tokenization — or the method of changing real-world and monetary belongings into digital tokens — has generated important curiosity from main establishments. 

A March 24 article that was printed by the World Financial Discussion board mentioned the mixing of conventional finance with blockchain is “now turning into a actuality” and that tokenization was taking middle stage. 

“With solely $25 trillion of securities presently eligible for collateral use — out of a $230 trillion potential — tokenization may considerably broaden liquidity and capital effectivity,” wrote Yuval Rooz, the co-founder of the New York-based firm Digital Asset. 

The tokenization business is anticipated to take off in the USA underneath President Donald Trump, who has promised to make America the blockchain and crypto capital of the world.

Tokenized securities platform Tokeny mentioned the Securities and Change Fee’s (SEC) repeal of SAB 121 could be a boon for the business by “enabling establishments to offer custody options for tokenized securities with out pointless monetary danger. 

In the meantime, BlackRock CEO Larry Fink has additionally grow to be a cheerleader for the tokenized securities market. In a January CNBC interview, Fink urged the SEC to “quickly approve” the tokenization of shares and bonds. 

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