Coinbase, a prominent cryptocurrency exchange, is pressing ahead with its futures contracts despite the industry’s regulatory hurdles in the United States. On June 1, Coinbase announced its intention to issue Bitcoin (BTC) and Ether (ETH) futures contracts on June 5, via its Commodity Futures Trading Commision (CFTC)-regulated derivatives exchange. These futures contracts are intended for institutional investors only.
Coinbase has set contract sizes at 1 Bitcoin and 10 Ether to control market exposure appropriately. Feedback from the exchange’s nano Bitcoin and nano Ether futures contracts impacted the decision to launch these products. Coinbase’s derivatives exchange intends to meet the specific demands of institutional investors by providing new solutions.
Coinbase announced its strategic intention to open a derivatives exchange in Bermuda on May 2 as part of its worldwide expansion. Using perpetual futures contracts, this project allows traders to speculate on the prices of Bitcoin and Ethereum. These futures provide up to 5X leverage, increasing traders’ exposure to potential market swings. All exchange trades will be completed in USDC, Circle’s stablecoin, providing participants with a stable and consistent value representation.
Coinbase’s plan to launch a futures exchange aligns with the company’s continuous attempts to resolve the regulatory uncertainty surrounding digital asset trading in the United States. The Securities and Exchange Commision (SEC) said in response to Coinbase’s petition for a writ of mandamus that the rulemaking process may take many years, implying that there is no rush to speed the processes.
The SEC has stated that it intends to use enforcement actions to clarify the regulation of crypto assets. The commision, however, stressed that Chair Gary Gensler’s public utterances should not be construed as formal guidance or official policy pronouncements issued by the SEC.
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