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- 1 Coinbase International Exchange procured a regulatory nod to offer futures trading to their investors.
- 2 For now, the platform will offer perpetual futures trading only to non-US retail investors.
- 3 Coinbase said that it would remain resolute about the compliance and security of crypto traders.
This big news enthused every crypto enthusiast this week. Coinbase International Exchange obtained the license to facilitate futures trading on its platform. The Bermuda Monetary Authority (BMA) had already granted the exchange a Class F license. For so many years, this has been a landmark moment for the entire crypto industry. Let’s find out why this news has a great impact on the crypto space.
A Big Step For Coinbase And Crypto Industry
Coinbase has been trying to bring mainstream trading into the crypto sphere for some time now. It made crypto derivatives services accessible to institutional users in May 2023. With this regulatory approval, it would now give customers entry to duly regulated perpetual futures contracts. On this occasion, the exchange stated that 75% of its crypto trading volume comes from the derivatives market.
The offering of futures contracts empowers the exchange to approach mainstream traders. It enables them to reach more traders in the crypto derivates domain. So far, this niche has been dominated by institutional entities only. But now, it would be more democratic and better. It would allow the platform to offer more liquidity to its traders. Furthermore, they would be doing everything under the regulatory ambit.
Available For Non-US Coinbase Users Only Now
Though the exchange has received major approval, it can’t serve US customers now. As per the sanction conditions, the exchange can offer services only to non-US customers. Investors from select nations will have to first go through the eligibility assessment. Once they make the grade, they will be able to invest in the instruments.
Notably, Coinbase International procured another important approval from the National Futures Association a little earlier. The body allowed the exchange to offer crypto futures exclusively to qualified institutional entities from the US. And now, it has gotten one step ahead with the permit to offer perpetual futures to retail customers. Though it’s limited in nature, the regulatory nod means a lot for the platform.
Significance Of This Event In Crypto Space
It marked a critical point in the crypto sphere and broadened its possibilities. Now, retail traders will also be able to access the derivatives market. However, there are a few factors that might be a little worrying for some. First of all, retail investors will now be exposed to more risks of losses. Of course, they’ll willingly make these choices. But the possibility has arisen because of this regulatory nod.
Secondly, the ongoing battle with the SEC puts Coinbase in a tentative position. If the verdict doesn’t go in its favor, investors will find it difficult to rely on the exchange. Despite all that, it’s a big step for a lot of crypto users. It also brings limitless possibilities for the crypto sphere as its trading range has widened. Traders are happy because they will have more options now. They’ll invest in major instruments using their digital assets.
More options and a wider scope make trading better for sure. However, one has to wait and see how this pans out for the crypto space.
With a background in journalism, Ritika Sharma has worked with many reputed media firms focusing on general news such as politics and crime. She joined The Coin Republic as a reporter for crypto, and found a great passion for cryptocurrency, Web3, NFTs and other digital assets. She spends a lot of time researching and delving deeper into these concepts around the clock, and is a strong advocate for women in STEM.
