Coinbase, the largest crypto exchange in the US, has announced that it has received regulatory approval from the Bermuda Monetary Authority (BMA) to offer perpetual futures trading services to retail customers outside the US. This is a major milestone for Coinbase, as it expands its access to the global derivatives market, which accounts for about 75% of crypto trading volume worldwide.
Highlights
- Coinbase International Exchange has received regulatory approval from the Bermuda Monetary Authority (BMA) to offer perpetual futures trading to eligible non-US retail customers.
- Perpetual futures are a type of crypto derivative that allows traders to speculate on the price movements of cryptocurrencies without an expiry date or settlement.
- Coinbase Advanced, a powerful retail trading platform, will launch perpetual futures trading in the coming weeks, expanding access to regulated derivatives to more global customers.
- Coinbase International Exchange follows the robust regulatory framework established by the BMA, maintaining high standards of risk management, compliance, and user protections.
- The global crypto derivatives market represents ~75% of crypto trading volume worldwide. Coinbase’s perpetual futures contracts have already seen over $5.5 billion in notional trading volume from institutions as of Q2.
What are perpetual futures and why are they important?
Perpetual futures are a type of derivative contract that allows traders to speculate on the price movements of an underlying asset, such as Bitcoin or Ethereum, without having to own or deliver the asset. Unlike traditional futures contracts, which have a fixed expiration date and settlement price, perpetual futures have no expiry and are settled on a regular basis, usually every 8 hours. This means that traders can keep their positions open indefinitely, as long as they have enough margin to cover their exposure.
Perpetual futures are important because they provide traders with more flexibility, liquidity and leverage than spot trading. They also enable traders to hedge their risks, arbitrage price differences and profit from both rising and falling markets. Perpetual futures are one of the most popular and widely used products in the crypto derivatives market, which has grown exponentially in recent years.
How does Coinbase offer perpetual futures trading services?
Coinbase offers perpetual futures trading services through its Coinbase International Exchange, a new non-US exchange that operates under a class F license from the BMA. The BMA is a forward-looking regulator that has established a robust regulatory framework for crypto businesses, with high standards of risk management, compliance and user protection.
Coinbase launched its international division in May 2023, with the aim of providing non-US institutional clients with access to regulated perpetual futures trading. Since then, Coinbase International Exchange has seen over $5.5 billion in notional trading volume from institutions as of Q2 2023.
Now, Coinbase has received additional approval from the BMA to extend its perpetual futures trading services to non-US retail customers as well. This means that eligible customers can access regulated perpetual futures contracts on Coinbase Advanced, a powerful retail trading platform that offers advanced features such as limit orders, stop orders and trailing stops. Coinbase Advanced will begin to offer perpetual futures trading in the coming weeks, as Coinbase expands its reach to more global customers.
Who can trade perpetual futures on Coinbase?
Perpetual futures trading on Coinbase is available to eligible non-US customers who meet certain criteria, such as having a verified identity, passing a suitability assessment and agreeing to the terms and conditions of Coinbase International Exchange. Customers can check their eligibility here.
Perpetual futures trading on Coinbase is not available to US customers or customers from certain jurisdictions where such trading is prohibited or restricted by law. Customers should also be aware of the risks involved in trading perpetual futures, such as price volatility, margin requirements, funding rates and liquidations.
Why choose Coinbase for perpetual futures trading?
Coinbase is the most trusted and safest name in crypto, with over 73 million verified users and over $223 billion in assets on platform as of Q2 2023. Coinbase has a proven track record of security, reliability and compliance, with over $10 billion in insurance coverage and over 50 licenses across 30+ jurisdictions.
Coinbase is also committed to providing its customers with the best products and services in the crypto industry, with a vision of creating more economic freedom and opportunity for people around the world. By offering regulated perpetual futures trading services to non-US retail customers, Coinbase is helping to update the global financial system and bring more trust and transparency to the crypto derivatives market.
