Coinbase Derivatives to launch futures trading for Dogecoin, Litecoin, Bitcoin Cash on April 1
In a move that signals growing mainstream acceptance, Coinbase Derivatives will introduce futures trading for three major cryptocurrencies – Dogecoin, Litecoin and Bitcoin Cash – starting April 1.
With self-certification from the Commodity Futures Trading Commission (CFTC), Coinbase aims to list these futures contracts quickly while complying with regulatory standards. Derived from Bitcoin, which has been recognized as a commodity by the Securities and Exchange Commission (SEC), these cryptocurrencies have been chosen for futures trading by leveraging their established position within the cryptocurrency market.
Dogecoin, initially considered a mild meme, is now receiving a lot of attention as it joins the list of tradable assets. Coinbase’s announcement that it would launch monthly cash-settled futures contracts for Dogecoin, Litecoin, and Bitcoin Cash was delivered in a separate letter to CFTC Secretary Christopher Kirkpatrick dated March 7. The letter outlines key details such as contract size, payment method and utilization. Benchmark ratio based on Market Vector.
Coinbase’s decision to utilize its own certification path under CFTC Rule 40.2(a) highlights its commitment to compliance. This approach allows new products to be introduced without direct approval from the CFTC, provided the products comply with the Commodity Exchange Act and CFTC regulations.
The regulatory classification of these cryptocurrencies as products rather than securities raises interesting questions within the industry. James Seyffart, Bloomberg Intelligence ETF research analyst, pointed out the significance of this development, especially in its distinction between these assets as “commodity futures” rather than “securities futures.” Given Bitcoin’s pedigree, it would be difficult to argue that it should be classified as a security, especially following the approval of the spot Bitcoin ETF. Coinbase’s strategic selection of these cryptocurrencies for futures trading reflects a nuanced understanding of regulatory dynamics and market trends.
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