Coinbase, one of the largest crypto trading platforms in the World, submitted a Formal Application for Registration with the NFA’s Futures Commission (FCM) on September 15.
Coinbase posted the following details on Twitter. The tweet was public and told everyone that Our next move is to broaden our trading options by introducing futures and derivatives on our platforms. The aim is to expand the bitcoin economy.
Upon approval as an approved FCM member under the NFA, Coinbase will need to join the Commodity Futures Trading Commission’s derivatives registry to be granted permission to proceed with its next steps.
Why is Coinbase interested in the futures?
For investors who do not want to possess an actual physical asset, futures and derivatives are financial market instruments that allow them to speculate on asset values without owning the underlying item. Traders can use such things to hedge against the value of their physical assets or create markets to facilitate the discovery of the value of their assets.
With the addition of futures and derivatives to its portfolio, Coinbase aims to have a lot easier transition than its previous ambitions to offer a loan product in the form of USDC coins. Remember that the Securities and Exchange Commission (SEC) has threatened to sue the firm if it successfully promoted this sort of product.
Coinbase earned $1.8 billion in revenue in the first quarter of this year while operating as a spot-only exchange exclusively. In addition to the demand for futures, and Coinbase wants a piece of the action. Exchanges gain money each time an asset trades on their platform (via spreads, premiums, or market-making), generating potentially billions of dollars in additional income every year.
Coinbase, on the other hand, raised $2 billion in a debt offering just a day before this occurrence. Goldman Sachs, an institutional bank, handled the sale of the debt notes, which brought in more than $7 billion in orders for a total of $1.5 billion in debt on offer earlier this week.