On Tuesday (May 2, 2023), a new player entered the global crypto derivatives market.
Coinbase, a major cryptocurrency exchange, is launching the Coinbase International Exchange, a platform aimed at institutional clients based outside the United States. This move comes as part of the company’s ongoing mission to bolster cryptocurrency adoption and use across the globe.
The International Exchange is a significant milestone for Coinbase, following the recent acquisition of a regulatory license from the Bermuda Monetary Authority (BMA). This development reflects the growing trend of jurisdictions worldwide creating regulatory frameworks that are receptive to cryptocurrency.
One of the key features of the International Exchange is the trading of perpetual futures. Coinbase says these instruments, which accounted for nearly three-quarters of global crypto trading volume in 2022, provide traders with additional flexibility. The exchange has already listed BTC and ETH perpetual futures contracts, and all trades will be settled in USDC. Leverage of up to 5x is being offered initially.
The new exchange is designed with several safeguards in place, including real-time risk management, liquidity provision by external market makers, dynamic margin requirements and collateral assessments, and a liquidation framework that meets rigorous compliance standards.
Coinbase’s partnership with the BMA, a high-standard regulator known for its transparency, compliance, and cooperation, is pivotal to the launch of the International Exchange. The BMA’s membership in various international organizations helps to ensure its adherence to international financial standards and best practices.
Although Coinbase continues to operate in the U.S., its launch of the International Exchange underscores its focus on global markets. This expansion is timely as more countries adopt crypto-friendly regulations, strategically positioning themselves as crypto hubs, a trend Coinbase hopes the U.S. will follow.