Coinbase derivatives exchange set to roll out BTC and ETH futures

As the cryptocurrency industry faces regulatory challenges in the United States, public crypto exchange Coinbase is moving forward with its futures contracts.

On June 1, Coinbase revealed its plans to introduce Bitcoin (BTC $27,124) and Ether (ETH $1,892) futures contracts on June 5 through its Commodity Futures Trading Commission-regulated derivatives exchange. The futures contracts will be targeted toward institutional investors.

According to Coinbase, the newly announced institutional-sized contracts will have a specific size of 1 Bitcoin and 10 Ether. This sizing is intended to enable clients to effectively manage market exposure. The decision to launch the products was driven by feedback the exchange received following the introduction of its nano Bitcoin futures and nano Ether futures contracts.

In addition, Coinbase stated that its derivatives exchange would be dedicated to fulfilling the requirements of institutional investors by offering them inventive solutions tailored to their specific needs.

On May 2, Coinbase announced its strategic move to launch a derivatives exchange in Bermuda, marking a step in its international expansion strategy. The exchange will allow traders to engage in speculation on the prices of Bitcoin and Ethereum through perpetual futures contracts. These contracts will offer leverage of up to 5x, allowing traders to amplify their exposure to potential price movements. Coinbase mentioned in the announcement that all trades conducted on the exchange will be settled in Circle’s USD Coin (USDC $1.00) stablecoin, providing a stable and reliable value representation for participants.

Coinbase’s decision to establish a derivatives exchange coincides with its ongoing efforts to address the need for regulatory clarity surrounding the trading of digital assets in the United States. In response to Coinbase’s petition for a writ of mandamus, the U.S. Securities and Exchange Commission (SEC) communicated that the rulemaking process could potentially span several years, indicating that it is not under any time pressure to expedite the proceedings.

The commission made it clear that it intends to utilize enforcement actions to bring clarity regarding the regulation of crypto assets. Nonetheless, the SEC emphasized that the public statements made by its chair Gary Gensler should not be interpreted as formal guidance or official policy statements issued by the commission.