Coinbase Pushes Forward with Futures Contracts

As the cryptocurrency industry in the United States faces regulatory challenges, the public cryptocurrency exchange Coinbase is moving forward with its futures contracts.

On June 1, Coinbase announced its intention to launch Bitcoin and Ethereum futures contracts on June 5 via its derivatives exchange, regulated by the Commodity Futures Trading Commission.

Futures contracts will target institutional investors.

According to Coinbase, the newly announced institutional-sized contracts will be 1 Bitcoin and 10 Ethereum.

The purpose of this size is to allow clients to manage market exposure effectively. Following the introduction of its nano Bitcoin futures and nano Ether futures contracts, the exchange received feedback that prompted the decision to launch the new products.

In addition, Coinbase stated that its derivatives exchange would be committed to meeting the needs of institutional investors by providing them with innovative, custom-tailored solutions.

The announcement of Coinbase’s plan to launch a derivatives exchange in Bermuda on May 2 marked an essential step in the company’s international expansion strategy.

By utilizing perpetual futures contracts, the business will enable traders to speculate on the prices of Bitcoin and Ethereum.

These contracts will provide up to 5x leverage, allowing traders to magnify their exposure to potential price fluctuations.

Coinbase announced that all exchange transactions would be settled in Circle’s USD Coin stablecoin, providing participants with a stable and reliable value representation.

Coinbase’s decision to establish a derivatives exchange coincides with its ongoing efforts to address the lack of regulatory clarity surrounding digital asset trading in the United States.

In response to Coinbase’s petition for a writ of mandamus, the U.S. Securities and Exchange Commission (SEC) stated that the rulemaking process could take several years, indicating that it is not under any time constraints to expedite the proceedings.

The commission clarified that it intends to use enforcement actions to explain crypto asset regulation.

However, the SEC emphasized that Gary Gensler’s public statements should not be construed as formal guidance or official policy statements issued by the commission.