Google’s parent company, Alphabet Inc., has made a $1 billion equity investment in the Chicago Mercantile Exchange Group, the exchange responsible for many crypto derivatives products. This marks the first time the company is investing in cryptocurrency-related products.
In a press release by CME group, the company announced the $1 billion investment from Alphabet in addition to a 10-year strategic partnership with Google Cloud which is aimed at accelerating the exchange’s move to the Cloud and changing the way global derivatives markets operate.
Google made the investment through the company’s non-voting convertible preferred stock. The announcement also stated, “Under the agreement, CME Group will migrate its technology infrastructure to Google Cloud beginning next year with data and clearing services, and eventually moving all of its markets to the cloud.”
What you should know
According to the announcement, the partnership will focus on delivering significant benefits to all market participants by expanding access, creating real-time data and analytics capabilities, introducing new products and services, increasing efficiencies and driving resiliency in the financial markets ecosystem.
Terry Duffy, Chairman and Chief Executive Officer, CME Group stated, “through this long-term partnership with Google Cloud, CME Group will transform derivatives markets through technology, expanding access and creating efficiencies for all market participants. To ensure a smooth transition, we will work closely with clients to implement a phased approach. This partnership will enable CME Group to bring new products and services to market faster – all in a flexible and scalable environment that will create a wide range of opportunities for the marketplace.”
Thomas Kurian, CEO, Google Cloud stated, “CME Group has a century-long track record of helping investors access new markets and is known for innovation in financial markets. Bringing together CME Group’s best-in-class financial talent with Google Cloud’s deep engineering expertise will help accelerate technological innovation in capital markets infrastructure.”
Terry Duffy has appointed Ken Vroman to a new role as Chief Transformation Officer to help facilitate the cloud migration for CME Group.
The CME Group was behind the first Bitcoin (BTC) futures contract launched in December 2017. Since that time, the exchange has continued expanding its offerings of crypto derivatives to include micro BTC futures, BTC options, and micro-Ether (ETH) futures.
According to data from CME Group, the average daily volume in its Bitcoin futures reached 6,243 contracts as of Nov. 3, with 13,417 open interest contracts. At the time of publication, the company’s market capitalization is $79.21 billion, making it a significant player in the industry.
The CME stock trades on the NASDAQ exchange, currently trading $220.57 a share as of the time of this writing.