- Coinbase gains US approval for crypto futures trading after a 24-month application process.
- National Futures Association approves Coinbase as a Futures Commission Merchant (FCM).
- Coinbase becomes the first US platform for regulated crypto futures and spot trading, facilitating broader participation.
Coinbase has finally gained permission to offer cryptocurrency futures trading within the United States, nearly 24 months after submitting their authorization application. In an announcement on Wednesday, Coinbase Financial Markets received the green light from the National Futures Association (NFA) to function as a Futures Commission Merchant (FCM). This designation permits them to buy and sell futures contracts, a role akin to that of a market maker.
Functioning as a self-regulatory body endorsed by the federal derivatives regulatory authority, the Commodity Futures Trading Commission (CFTC), the National Futures Association (NFA) has bestowed its approval. Coinbase initiated its pursuit of NFA membership back in September 2021. Futures involve contractual agreements that enable traders to speculate on the direction of various markets, such as those related to commodities like oil and wheat, or financial instruments like the S&P 500.
As a result of this endorsement, Coinbase becomes the inaugural cryptocurrency-oriented platform in the United States to provide regulated and leveraged cryptocurrency futures in conjunction with conventional spot trading, as stated in their official announcement. According to Coinbase Financial Markets’ CEO Andrew Sears the significance of providing secure and regulated cryptocurrency futures to American investors. He noted that this step is crucial for fostering expansion and facilitating wider engagement in the cryptocurrency economy.
In June, the crypto division of Cboe Global Markets, known as Cboe Digital, obtained the necessary approval from the Commodity Futures Trading Commission (CFTC) to introduce futures contracts for margined bitcoin and ether. Moreover, CFTC Commissioner Christy Goldsmith Romero stated,
“I have been vocal about the benefits of bringing appropriate crypto activities into the regulated space in order to protect customers, but in a way that supports oversight, accountability, transparency, and risk management.”
CFTC Commissioner Christy Goldsmith Romero
In most recent updates, Coinbase Global has expressed its intention to offer crypto futures to customers in the United States within the upcoming weeks, as reported by a recent Wall Street Journal article.
