As it is understood after two years of filing a petition to join the National Futures Association (NFA) in September 2021, Coinbase, a cryptocurrency exchange, finally got the approval to list crypto futures in the United States (US). As per the announcement made on August 16, 2023, Coinbase financial markets, Inc. made it to the regulatory approval from the National Futures Association (NFA), a CFTC-designated self-regulatory organisation, to operate a Futures Commission Merchant (FCM) and offer eligible US customers access to crypto futures. “Offering US investors access to secure and regulated crypto futures is key to unlocking growth and enabling broader participation in the crypto economy,” Andrew Sears, CEO, Coinbase Financial Markets, explained.
Industry experts believe, in September of 2021, Coinbase filed an application with the NFA to register an FCM. It is believed that this was done to ensure that their FCM’s business model can be able to fulfil the CFTC’s customer protection requirements.
Interestingly, the global crypto derivatives market currently represents about 75% of crypto trading volume worldwide and is supposed to be an important trader access point, as per insights from Coinbase, a cryptocurrency exchange. The ability to trade using margin is expected to provide customers with leverage and access to the crypto market with less investment in comparison to traditional spot trading.
“ The approval for crypto futures trading can encourage development around crypto and will work as a template for other countries. Derivatives trading is expected to constitute about 75% of the global trade volumes and it seems that the industry has been proactive to ensure customer interests are protected,” Manhar Garegrat, country head, India and global partnerships, Liminal, a wallet infrastructure and custody solutions platform, concluded.
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