Chicago Mercantile Exchange (CME) director nominee believes that the exchange, one of the few regulated crypto-derivatives providers, should issue its own tokens in addition to bitcoin mining with renewable energy.
Dante Federighi said in a filing to the Securities and Exchange Commission (SEC), that if elected, he would turn CME B-shares into “New CME Tokens” to improve governance by making membership accessible and improving liquidity.
After demutualization in 2000, CME B-shares were distributed to CME members-the main market participants of the exchange. B-shares are only available to CME members compared to publicly tradable A-shares and offer special voting rights to elect six people to the board of directors, the Federighi position seeks.
Blockchain Could Replace Complex Legacy Structures
Federighi, a member of the CME since 1997, argued that the exchange needed to create as many as 9,600 CME tokens, representing hundredths of a B-share each. The blockchain could replace complex legacy structures, with tokens being redistributed to existing holders of B-shares, he said.
“Digitize and fractionalize B-shares into hundredths of a membership. Let them trade freely on a blockchain where all transactions and ownership are recorded,” Federighi said in his proposal. Tokens would “enable future owners to gradually buy into a membership over time.”
Federighi also suggested that CME should build its own renewable energy plants to power operations and “divert the excess energy to mine Bitcoin and other cryptocurrencies,” which could be “converted immediately” into fiat.
That would not only create a new revenue stream that is environmentally friendly, but it would also help familiarize the exchange with a new technology and asset class, he said.
“While this seems outside of our core competencies, I’d argue this is our business: we, like the miners, match and clear trades,” he said.
A footnote says that CME management has not checked the proposals and “some may not be feasible.” When asked if he considered his measures to be radical, Federighi said he was standing by all his proposals. He declined to further comment, citing election process rules.