Coinbase International Exchange launches global derivatives platform
Coinbase, a public crypto exchange, is launching a new institutional platform, the Coinbase International Exchange (CIE), designed for crypto derivatives trading. The move comes as the cryptocurrency industry faces regulatory challenges in the United States. The CIE will start trading by listing Bitcoin and Ether perpetual futures, with all trading settled in Coinbase-backed stablecoin USD Coin, requiring no fiat on-ramps.
Coinbase stated that direct access trading on CIE is only available to institutional clients via application programming interface in eligible, non-U.S. jurisdictions. It also stressed that the new international crypto platform is launched with the support of regulators in Bermuda. Coinbase obtained a license from the Bermuda Monetary Authority in mid-April 2023, allowing the company to operate a digital asset exchange and a digital asset derivatives exchange provider.
Bermuda’s regulatory environment is known for a “high level of transparency, compliance and cooperation,” according to Coinbase. The self-governing British overseas territory with a parliamentary government has been friendly to crypto, growing increasingly bullish on the crypto industry recently.
Coinbase faces regulatory unpredictability in the broader cryptocurrency sector
The news of Coinbase’s launch comes amid regulatory unpredictability in the broader cryptocurrency sector, which has led major U.S. investment bank Citigroup to downgrade Coinbase shares to neutral or high risk from buy or high risk. According to Citigroup analyst Peter Christiansen, regulatory unpredictability is a looming threat to Coinbase.
Coinbase shares have already plummeted in recent weeks, dropping from a high of nearly $72 in April to $50 on Monday, May 1. The exchange officially announced that it received a Wells notice from the United States Securities and Exchange Commission and filed a motion against the SEC on April 25, asking the regulator to clarify industry regulations.
In contrast, Bermuda remains open to crypto despite industry failures, like the collapsed FTX crypto exchange. Bermudan Premier and Finance Minister Edward Burt declared that the government remains open to crypto, and local authorities also stated that Bermuda would keep its crypto hub ambitions despite the industry facing a massive bear market in 2022.
Conclusion
Coinbase’s launch of the Coinbase International Exchange, which will list Bitcoin and Ether perpetual futures, comes at a time when regulatory unpredictability in the broader cryptocurrency sector is leading to uncertainty in the market. While Citigroup has downgraded Coinbase shares to neutral or high risk, Bermuda remains bullish on the crypto industry and is providing regulatory support for the new international crypto platform.
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