Coinbase Obtains Approval to Offer Regulated Crypto Futures Trading in the US

SUMMARY

• Coinbase has secured approval from the National Futures Association (NFA) to offer regulated cryptocurrency futures trading for eligible U.S customers
• Coinbase views access to a CFTC-regulated crypto derivatives market as a pivotal driver for expanding the crypto economy 
• The exchange has been actively collaborating with regulators since it filed an application with the NFA to register as a Futures Commission Merchant (FCM) in September 2021.

In a significant development, cryptocurrency exchange Coinbase announced Wednesday, that it has secured approval from the National Futures Association (NFA) to offer regulated cryptocurrency futures trading for eligible customers in the U.S through Coinbase Financial Markets.

The move, which comes as part of the platform’s commitment to transparency and adherence to regulations, is poised to bolster confidence among both individual traders and institutional investors. The company views access to a CFTC-regulated crypto derivatives market as a pivotal driver for the expansion of the cryptocurrency economy and wider participation in the sector.

“Approval for US customers to access regulated crypto derivatives will allow more people to access the cryptoeconomy in the United States in a safe way that helps keep the US at the center of digital innovation,” said Coinbase.

Having initiated the process in September 2021 by filing an application with the NFA to register as a Futures Commission Merchant (FCM), Coinbase has been actively collaborating with regulators since then. The goal is to ensure full compliance with regulatory requirements and align the business model of the FCM with the customer protection standards outlined by the CFTC.

This integration seamlessly complements the existing spot market, with oversight from both the CFTC and the NFA, ensuring a safe and compliant trading environment. The approval is anticipated to empower a wider audience to tap into the burgeoning cryptoeconomy while maintaining the US's role as a hub for digital innovation.

Coinbase's strategic acquisition of FairX in 2022, now Coinbase Derivatives Exchange, played a pivotal role in this development, providing a solid foundation for introducing regulated futures trading. Nano Bitcoin and Ethereum futures contracts were successfully launched, catering to both retail and institutional investors. The exchange's growing liquidity pool, with $4.7 billion BTC and $2.0 billion ETH futures traded in notional volume thus far in 2023, reinforces its prominence in the sector.

The approval of FCM status is a significant stride forward for Coinbase's mission of offering transparent and secure markets. In the coming months, further details will be unveiled regarding how verified US customers can access Coinbase's comprehensive futures offerings.

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