Key Insights
- Coinbase International Exchange gains regulatory approval to offer perpetual futures trading to non-U.S. retail customers.
- Previously serving institutional clients, this move aims to democratize the crypto derivatives market, which accounts for approximately 75% of crypto trading volume.
- Despite regulatory challenges, including a lawsuit from the SEC, Coinbase continues its global expansion.
Coinbase International Exchange, a cryptocurrency exchange holding a class F license granted by the Bermuda Monetary Authority (BMA), has announced a significant development. It has received further regulatory clearance, which allows the platform to introduce perpetual futures trading for retail customers outside the United States.
This expansion comes hot on the heels of Coinbase International’s launch in May 2023, where it initially focused on providing crypto derivative services exclusively to institutional clients. However, with the recent green light from regulators, the cryptocurrency exchange is gearing up to offer eligible customers access to fully regulated perpetual futures contracts via the Coinbase Advanced platform in the near future. It’s important to note that these perpetual futures accounts will be administered by Coinbase Bermuda and subject to the regulatory oversight of the BMA.
The announcement from the crypto exchange highlights a significant trend in the world of digital assets. According to Coinbase, a staggering 75% of the trading volume in the cryptocurrency market stems from the derivatives sector. This newfound regulatory approval is expected to democratize the crypto derivatives market, historically dominated by institutional players, by enabling retail traders to participate more actively.
Read also! Coinbase Secures Regulatory Approval for Crypto Futures Trading
Coinbase is keen to emphasize that it does not engage in market-making activities. Instead, the liquidity on its platform is provided by established, independent liquidity providers who have undergone rigorous compliance assessments.
Unlocking the Derivatives Market for Retail Traders
In the eyes of Coinbase, its platform is poised to become the preferred gateway for retail traders to securely and competently access the derivatives market. However, it’s important to note that only non-U.S. consumers from select countries are eligible to use Coinbase International Exchange. Prospective customers must undergo a suitability assessment before gaining access to a Coinbase Advanced trading account.
This recent regulatory approval marks another significant achievement for Coinbase International, following its endorsement by the National Futures Association (NFA) a mere month ago. The NFA’s approval granted the exchange the authority to offer cryptocurrency futures investments to eligible institutional clients within the United States.
Coinbase’s ongoing expansion efforts have not been without challenges. The exchange has been embroiled in a regulatory dispute with the U.S. Securities and Exchange Commission (SEC), which initiated a lawsuit against Coinbase in early June. The SEC alleges that the exchange violated local securities regulations by facilitating the sale of unregistered securities. Despite these hurdles, Coinbase is forging ahead with its global ambitions.