American crypto exchange Coinbase has acquired approval from the government to offer Bitcoin (BTC) and Ethereum (ETH) futures in the US.
In a new company blog post, Coinbase says it has been given the green light by the National Futures Association (NFA) to manage a futures commission merchant (FCM) and offer eligible US traders BTC and ETH futures products.
FCMs are federally regulated entities that offer and accept futures contracts related to securities and commodities.
“In September of 2021, we filed an application with the NFA to register an FCM. Our team has worked with regulators since then to ensure we will comply with all the necessary regulations and that our FCM’s business model meets the CFTC’s (Commodity Futures Trading Commission) customer protection requirements…
Today, we are pleased to announce that approval has been secured, which will allow eligible US customers to access regulated derivatives products through Coinbase Financial Markets and alongside our spot market for a seamless experience subject to the oversight of the CFTC and the NFA.”
According to the blog post, Coinbase will be the first crypto firm to offer both traditional spot market trading as well as federally regulated crypto futures.
The crypto exchange further highlights the importance of the milestone, saying that derivatives contracts will broaden access to digital assets and better allow traders to manage risk.
“The global crypto derivatives market represents ~75% of crypto trading volume worldwide and is a critical trader access point. The ability to trade using margin gives customers leverage and access to the crypto market with less upfront investment than traditional spot trading.
Being able to express long and short positions, investors also use derivatives to manage risk on their underlying crypto assets.”
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3 Comments
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