One of the best-known cryptocurrency exchange platforms, Coinbase, continues to expand its services. After its lending offer that earned it the wrath of the SEC, now it plans to offer futures contracts on Bitcoin and other crypto currencies.
Soon financial products derived from cryptos on Coinbase?
Since the NASDAQ listing of its COIN stock last April, Coinbase has shown its willingness to increasingly supplement the crypto services it offers to its users.
In addition to regularly adding new projects, Coinbase also wants to give its investors as many tools and trading methods as possible. This September 15, Brian Armstrong’s platform thus announced the filing of an application with the National Futures Association (NFA) to offer crypto futures to its customers:
“Today, Coinbase filed an application with the NFA to register as an FCM (futures commission merchant). This is the next step in expanding our offerings to include futures and derivatives trading on our platforms. Goal: to continue the growth of the crypto-economy.”
A considerable market, but under constant regulatory threat
As can be seen below, one can indeed find the application – for now pending – issued by Coinbase Financial Markets to become a member of the NFA, on its website.
This registration with the NFA, if it is indeed validated, will only be a first step for the crypto exchange, as Coinbase will then have to register with the Commodity Futures Trading Commission (CFTC), one of the 2 main American financial regulators.
When you consider that some crypto derivatives platforms, such as BitMEX, have had to pay dearly for their non-compliance, it’s understandable that Coinbase wants to do things right.
But it’s worth the risk, as the potential of these futures markets in the crypto-asset sector is huge. The 3 current industry leaders, Binance, FTX and Bybit, have seen over $20 billion in open positions (open interest) on their futures in the last 24 hours prior to this article.
This is a substantial windfall that Coinbase wants to take its share on. In fact, it is precisely to develop such new sources of revenue that Brian Armstrong’s company has just launched its first bond issue to raise $2 billion.