Coinbase Pushes Forward with Bitcoin and Ether Futures Contracts Amid US Regulatory Challenges

Coinbase Pushes Forward with Bitcoin and Ether Futures Contracts Amid US Regulatory Challenges

Amidst regulatory challenges in the United States cryptocurrency industry, Coinbase, a prominent public crypto exchange, is forging ahead with its futures contracts.

On June 1, Coinbase announced its plans to launch Bitcoin and Ether futures contracts on June 5 via its derivatives exchange, regulated by the Commodity Futures Trading Commission (CFTC). These futures contracts will primarily cater to institutional investors.

Coinbase stated that the newly introduced institutional-sized contracts will have fixed sizes of 1 Bitcoin and 10 Ether. This particular sizing aims to assist clients in effectively managing their market exposure. The decision to introduce these products was driven by feedback received by the exchange after the launch of its nano Bitcoin futures and nano Ether futures contracts.

Furthermore, Coinbase expressed its commitment to providing innovative solutions tailored to the specific needs of institutional investors through its derivatives exchange.

In a strategic move towards international expansion, Coinbase disclosed on May 2 its intention to establish a derivatives exchange in Bermuda. This exchange will enable traders to engage in speculation on the prices of Bitcoin and Ethereum through perpetual futures contracts. These contracts will offer leverage of up to 5x, allowing traders to amplify their potential exposure to price movements. Coinbase emphasized that all trades conducted on the exchange will be settled in Circle’s USD Coin stablecoin, ensuring stability and reliability for participants.

Coinbase’s decision to establish a derivatives exchange aligns with its ongoing efforts to address the need for regulatory clarity surrounding the trading of digital assets in the United States. In response to Coinbase’s petition for a writ of mandamus, the U.S. Securities and Exchange Commission (SEC) conveyed that the rulemaking process could potentially span several years, indicating no immediate pressure to expedite proceedings.

The SEC clarified its intention to employ enforcement actions as a means to bring clarity to the regulation of cryptocurrency assets. Nevertheless, the commission emphasized that public statements made by SEC Chair Gary Gensler should not be interpreted as formal guidance or official policy statements issued by the commission.