In recent advancements, Coinbase International has announced they will launch perpetual futures trading for non-US retail customers. This follows after receiving additional regulatory approval in a comparatively short period of last month’s admission to offer crypto derivatives services to institutional clients in specific US states. The approval comes from Coinbase International’s class F license holder, the Bermuda Monetary Authority (BMA).
In May 2023, Coinbase International was already offering crypto derivatives services to institutional patrons. The recent approval, however, will begin providing eligible retail customers with access to regulated perpetual futures contracts on the Coinbase Advanced platform. The exchange noted that the Perpetual Futures accounts would have their maintenance overseen by Coinbase Bermuda Limited, under the regulation of the BMA.
Crypto trading’s pulse is strongly reliant on the derivatives market, with nearly 75% of volume stemming from it. On the one hand, the latest regulatory approval will allow previously locked-out retail traders to explore and interact with a market mainly controlled by institutions, leveling the playing field somewhat. On the other hand, a complication arises as the current framework of Coinbase does not participate in market making. Instead, the exchanges liquidity is entirely supplied by independent, established liquidity providers that have undergone rigorous compliance reviews.
The operation of Coinbase International has its limitations. Non-US clientele in selected countries can use the exchange, with customers undergoing a series of tests to evaluate their eligibility for the product before they can open a Coinbase Advanced trading account.
The most recently granted permission for Coinbase International to provide perpetual futures to retail customers comes just after receiving a nod from the National Futures Association to offer such services to eligible institutional clients in the United States. This seems to be a positive step for the company in its endeavors outside the United States.
Despite these positive strides, Coinbase confronts a regulatory struggle with the U.S. Securities and Exchange Commission. The regulator filed a case against Coinbase, alleging that the exchange has violated local securities laws by selling unregistered securities. As a result, while the new approval brings a host of potential benefits, it also escalates the insecurity of the market and raises questions about the overall future of cryptocurrency exchanges and their allowable services.
Source: Cointelegraph
