- Coinbase Financial Markets, Inc. attains regulatory approval from the National Futures Association (NFA) to offer crypto futures to qualified US clients.
- The approval positions Coinbase as the maiden crypto-centric platform in the US to proffer regulated and leveraged crypto futures in conjunction with traditional spot trading.
A Leap Towards Crypto Regulation and Transparency
The wheels are in motion for Coinbase clients to directly tap into the futures via Coinbase Financial Markets. For Coinbase, the nexus between regulation and clarity is not just pivotal, but it’s the cornerstone upon which trust is built for both individual investors and large institutions. Engaging in the crypto derivatives market that’s under the purview of the Commodity Futures Trading Commission (CFTC) becomes paramount to usher in robust growth and to foster a wider embrace of the cryptoeconomy.
This moment was years in the making. It's is a testament to Coinbase’s unwavering commitment to safeguard our customers. Put simply, at every juncture, Coinbase has invested the time and diligence required to align with regulators actually interested in … regulating. 1/3 https://t.co/Fq5zhWKdfn
— paulgrewal.eth (@iampaulgrewal) August 16, 2023
Back in September 2021, the seeds were sown when Coinbase approached the NFA with an application to become a registered Futures Commission Merchant (FCM). The subsequent period has been marked by rigorous interactions with regulatory bodies to ensure that the proposed FCM model is in harmony with the protective measures that the CFTC has in place for customers. By deciding to go public in the US, Coinbase extended its faith in the US’s potential to provide a nurturing environment for the cryptoeconomy, replete with high-caliber consumer safeguards.
An Important Milestone
This pivotal juncture is significant, marking a unique opportunity to present regulated crypto offerings to the vast American clientele. With a clear and coherent regulatory framework, Coinbase’s modus operandi is to synergize with authorities and gain permissions that resonate with their core mission: harnessing the power of crypto to upgrade the financial fabric, thereby fueling economic liberty and opportunities.
Today’s announcement underscores this vision. The green light ensures that a larger demographic in the US can now explore the cryptoeconomy under a protective umbrella, fortifying the nation’s stature as a digital pioneer.
The global crypto derivatives arena commands a staggering 75% share of the worldwide crypto trading volume, making it an indispensable gateway for traders. Introducing futures to this mix is crucial. Traders gain the power to navigate the crypto market with a smaller initial outlay, courtesy of the leverage that futures bring to the table. This strategic move follows Coinbase’s 2022 acquisition of FairX, a CFTC-sanctioned futures exchange that now goes by the name of Coinbase Derivatives Exchange. With FairX under its wing, Coinbase effectively rolled out nano Bitcoin and Ethereum futures contracts tailored for retail investors. Furthermore, June witnessed the unveiling of heftier versions targeting institutional players.
Today, as the Coinbase Derivatives Exchange welcomes third-party brokers, FCMs, and market makers, it boasts a robust liquidity reservoir, with a trading volume that has touched a staggering $4.7bn for BTC and $2.0bn for ETH futures in 2023 alone. This NFA approval serves as a testament to Coinbase’s unwavering commitment to offer its clientele a transparent and secure market. The future looks bright as more details about the futures offering are slated to roll out for verified US clients in the upcoming months.