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Coinbase Secures Regulatory Approval for Retail Perpetual Futures Trading

Coinbase’s Bermuda subsidiary, Coinbase International Exchange, secures regulatory approval to offer retail perpetual futures, positioning itself as a competitor to Binance in this market.

Key Points

  • Coinbase receives approval from the Bermuda Monetary Authority to offer retail perpetual futures via its Bermuda-based entity.
  • This development positions Coinbase as a potential competitor to Binance in the crypto perpetual-futures market.
  • Perpetual futures are popular due to their ability to facilitate leveraged trading with lower capital requirements.
  • Coinbase aims to solidify its position as a trusted platform and expand its reach in the crypto market.

Coinbase, a preeminent cryptocurrency trading platform, has disclosed that its Bermuda-based subsidiary, Coinbase International Exchange, has secured approval from the Bermuda Monetary Authority to offer perpetual futures to retail customers outside the United States.

This marks Coinbase’s foray into the perpetually expanding market for perpetual futures, asserting its resolve to supply a diverse range of services to its international clientele.

The approval allows Coinbase to be a direct competitor to Binance, the current leader in the crypto perpetual-futures market.

This step signifies the platform’s expansion strategy and commitment to providing comprehensive services to its global user base.

About Perpetual Futures

Perpetual futures are derivatives that allow investors to place leveraged bets on cryptocurrency prices without any expiry, usually requiring lower upfront capital, making them popular among retail investors. Unlike their traditional counterparts, they closely track the prices of the underlying assets.

Since its international exchange launch in May, initially focusing on institutional investors outside the United States, Coinbase introduced perpetual futures contracts.

This regulatory green light enables Coinbase to expand its offerings and to delve into the most extensive crypto market, aiming to strengthen its status as a reliable platform for cryptocurrency trading.

Coinbase’s compliance and emphasis on safety can offer a secure alternative for investors, challenging Binance’s market dominance and potentially garnering more market share in the derivatives trading space, especially considering the regulatory scrutiny Binance has been under globally.

However, Coinbase has faced its share of regulatory challenges, including accusations from the US SEC of operating as an unregistered securities exchange, which the company firmly denies.

It has initiated lobbying efforts in Washington, D.C., seeking a congenial regulatory atmosphere and advocating for legislative clarity and robust frameworks for crypto trading in the United States.

Concluding Thoughts

This approval signals a strategic move by Coinbase to venture into new markets and expand its service repertoire, providing more diversified options to its global users and bolstering its presence in the competitive crypto space.

By maintaining compliance and prioritizing security, Coinbase is positioning itself as a reliable contender in the global cryptocurrency and derivative trading landscape.