(Bloomberg) — CME Group Inc. is testing Google Cloud’s blockchain technology as it seeks to improve market infrastructure amid the global shift toward round-the-clock trading.
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The Chicago-based exchange operator is piloting payment solutions and the tokenization of assets using distributed ledger from Google Cloud, according to a statement Tuesday. CME has completed the first phase of integration and testing of the Google technology, it said.
“Google Cloud Universal Ledger has the potential to deliver significant efficiencies for collateral, margin, settlement and fee payments as the world moves toward 24/7 trading,” CME Chief Executive Officer Terry Duffy said in the statement.
CME is one of the first US exchanges to test blockchain technology, as firms and regulators discuss improving the market’s infrastructure to support overnight stock trading. President Donald Trump has promised a friendly US regulatory environment for digital assets and blockchain, with several legal cases and investigations targeting crypto companies dismissed or paused since he took power.
Trump’s administration has encouraged Congress to “create landmark legislation for common-sense market structure,” Duffy said.
Some industry leaders such as Chicago-based trading firm DRW Holding’s Don Wilson have long stated that blockchain technology can help move assets quickly, efficiently and with lower costs. His firm backed Digital Asset, a crypto company that developed its own blockchain technology called the Canton Network, which is being used by firms including Goldman Sachs Group Inc. and Moody’s Ratings.
CME’s equity index options on futures offer round-the clock trading through indexes. Futures contracts on other assets, including FX, interest rates, metals and energy, as well as cryptocurrency all trade 24 hours a day, with some breaks during the week.
The partnership with Google Cloud is part of a larger deal the pair struck in 2021 to help the derivatives exchange operator with its technology needs. The 10-year alliance is meant to migrate CME’s data, clearing services and eventually trading into the cloud. As part of the agreement, Google made a $1 billion equity investment in the exchange operator.
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