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.

Coinbase, on June 1, revealed its plans to introduce Bitcoin (BTC) and Ethereum (ETH) futures contracts on June 5 through its Commodity Futures Trading Commission (CFTC)-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 Ethereum. This sizing is intended to enable clients to effectively manage their exposures in the market. The decision to launch these products was driven by the feedback received by the exchange following the introduction of its nano Bitcoin (BIT) and nano Ether (ET) contracts.

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

Coinbase on May 2, made an announcement regarding its strategic move to launch a derivatives exchange in Bermuda, marking a step in its international expansion strategy. Notably, the exchange will provide traders with the opportunity 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 the Circle’s stablecoin, USDC, providing a stable and reliable value representation for participants.

Related: China to gain most from restrictive US crypto regulations — Coinbase CEO

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 within the United States. In response to Coinbase’s petition for a writ of mandamus, the Securities and Exchange Commission (SEC) communicated that the process of rulemaking could potentially span several years, indicating that they are not under any time pressure to expedite the proceedings.

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

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