Cryptocurrency ethereum steps closer to institutional trading

Two digital-oriented companies have teamed up to establish a benchmark price for ethereum, the world’s second-largest cryptocurrency by market value.

The New York-based blockchain application startup ConsenSys, in partnership with TrueDigital, a subsidiary of global electronic exchange for interest rate swaps trueEX, announced plans to develop a target reference index for ethereum prices. The move is an initial part of a broader project to make more crypto-trading products available for institutional investors, such as banks, investment funds, brokerage firms or insurance companies.

At the same time, the trueEX exchange said it was planning to start a derivatives marketplace for trading cryptocurrency assets. The opening product is expected to be a bitcoin contract, which will be trading on the firm's swap platform. The contract, which will be marketed under the TrueDigital brand, is reportedly waiting for approval from the US Commodity Futures Trading Commission (CFTC).

If approved, the project may accelerate the development of exchange products for ethereum with an official price index reference. Last year, the US regulator authorized trading of bitcoin futures offered by CME Group and the Chicago Board Options Exchange (CBOE).

“Institutional investors and commercial partners are ready for a regulated and liquid marketplace to gain exposure to and hedge these increasingly important digital currencies and commodities,” said the founder of TrueDigital, Sunil Hirani, as quoted by Coindesk.

“But the marketplace is sorely lacking the necessary foundation, infrastructure and platforms that institutional investors have come to expect in other important markets,” Hirani added.

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