- CME just validated XRP by launching a new benchmark to track the coin’s price.
- The community appears to have taken this update well with price jumping by over 4%.
XRP, the cryptocurrency associated with Ripple Labs Inc. has found itself a new home, launching on the Chicago Mercantile Exchange (CME). Notably, CME, one of the world’s leading derivatives platforms has added new benchmarks like XRP/USD to track XRP.
CME Expand Offerings to Include XRP Benchmarks
Recall that CME announced its intentions to list XRP benchmarks on its platform, as noted in our earlier article. The idea is to ensure XRP’s price can be reported in a trusted and transparent manner across platforms.
Aligning with the earlier announcement, CME has now officially added XRP benchmarks. Two XRP benchmarks confirmed on the CME platform include the Real-time Index for the XRP/USD pair (XRPUSD_RTI) and the Reference Rate for the XRP/USD pair (XRPUSD_RR).
The Reference Rate (XRPUSD_RR) daily measures the value of XRP in US dollars. CME calculates it once a day using trade data from selected crypto exchanges. On the other hand, a constant and up-to-date price of XRP against the US dollar is provided by the Real-time Index (XRPUSD_RTI).
To determine rates, CME uses a methodology that involves averaging the XRP trade prices over a given period on a few crypto exchanges like Coinbase and Bitstamp. By doing this, the effects of outliers and short-term price volatility are lessened.
The rate can be used as a benchmark in derivatives, financial contracts, and other XRP-related financial instruments. CME partners with Crypto Facilities (CF), a UK-based crypto trading platform to offer these rates.
It is interesting to note that CME classifies XRP under the “Payment and Store of Value” sub-category. This has brought reactions from the XRP community who have long maintained that XRP is a payment utility token.
As a reminder, XRP has witnessed intense scrutiny from regulators, with the US Securities and Exchange Commission (SEC) claiming that the asset is a security.
Although the matter is yet to be finalized, Judge Analisa Torres ruled in July that the programmatic sales of XRP on exchanges do not constitute a security.
Benefits of the CME Listing for XRP
The listing of XRP benchmarks on CME is expected to increase the token’s visibility, consequently leading to more adoption. Part of this visibility consists of a public domain that is simple to access and offers real-time pricing for the token.
Meanwhile, XRP is reacting favorably to the news and is up 4.5% in the past week. XRP experienced a 4.7% surge in the past day, setting its price at $0.6496.
The trading volume increased by an outstanding 133% to $2.8 billion. As highlighted in our earlier report, Ali Martinez, a top crypto analyst says XRP has broken above the triangle pattern. Based on this trend, the analyst claims XRP could set a new yearly high at $0.9.
