CME Group taps Google Cloud for pilot asset tokenization program

US derivatives exchange operator CME Group is piloting solutions for tokenized assets using Google Cloud Universal Ledger (GCUL), a new distributed ledger that was designed for traditional financial institutions.

CME has begun integrating GCUL to improve capital market efficiency and wholesale payments, the company announced on March 25.

CME Group Chairman and CEO Terry Duffy said GCUL could “deliver significant efficiencies for collateral, margin, settlement and fee payments as the world moves toward 24/7 trading.”

The announcement did not provide details about which assets would be tokenized. CME Group and Google Cloud will begin testing the technology with market participants in 2026.

Source: CME Group

Google Cloud has been expanding into blockchain technology for several years, beginning in 2018 by adding Bitcoin blockchain data to its data warehouse. 

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

Related: Google boss expects to spend $75B on AI this year

Tokenization — or the process of converting real-world and financial assets into digital tokens — has generated significant interest from major institutions. 

A March 24 article published by the World Economic Forum said the integration of traditional finance with blockchain is “now becoming a reality” and that tokenization was taking center stage. 

“With only $25 trillion of securities currently eligible for collateral use — out of a $230 trillion potential — tokenization could significantly expand liquidity and capital efficiency,” wrote Yuval Rooz, co-founder of the New York-based company Digital Asset. 

The tokenization industry is expected to take off in the United States under President Donald Trump, who has promised to make the US the blockchain and crypto capital of the world.

Tokenized securities platform Tokeny said the Securities and Exchange Commission’s (SEC) repeal of SAB 121 would be a boon for the industry by “enabling institutions to provide custody solutions for tokenized securities without unnecessary financial risk. 

Excluding stablecoins, the RWA tokenization market is approaching $20 billion. Source: RWA.xyz

Meanwhile, BlackRock CEO Larry Fink has also become a cheerleader for the tokenized securities market. In a January CNBC interview, Fink urged the SEC to “rapidly approve” the tokenization of stocks and bonds. 

Related: Tokenized real estate trading platform launches on Polygon