In a series of communications addressed to the United States Commodity Futures Trading Commission (CFTC) on March 7, Coinbase Derivatives revealed its intention to introduce cash-settled futures contracts for select cryptocurrencies on its platform, potentially preceding formal approval from the regulatory body.
Employing a “self-certification” process, Coinbase asserts the forthcoming futures contracts’ adherence to regulatory standards established by the CFTC. Notably, one of the letters outlines plans for the introduction of Dogecoin futures trading, tentatively scheduled for April 1, 2024.
The announcement precipitated significant market activity, with Dogecoin (DOGE) witnessing a 16.1% surge, Bitcoin Cash (BCH) up by 11.4%, and Litecoin (LTC) climbing 7.8%, outpacing the overall crypto market’s 6.2% growth on March 20.
Presently, Coinbase Derivatives extends futures contracts for Bitcoin (BTC) and Ethereum (ETH) to both institutional and retail investors, alongside contracts for crude oil.
The selection of these particular cryptocurrencies for futures contracts by Coinbase bears significance due to their shared foundational code with Bitcoin, now widely recognized as a commodity by regulatory authorities.
James Seyffart, an ETF analyst at Bloomberg, remarked on the strategic move, suggesting it might prompt the Securities and Exchange Commission (SEC) to refine the differentiation between securities and commodities, extending beyond existing justifications.
Scott Johnsson, General Partner and General Counsel at Van Buren Capital, emphasized the broader implications of Coinbase’s initiative, forecasting it as the harbinger of a wider trend and foreseeing additional applications amid shifts in US regulatory leadership.
Johnsson also underscored the potential significance of such futures listings in paving the way for spot crypto ETFs.
These developments unfold against the backdrop of the SEC‘s recent approval of spot Bitcoin ETFs, following a protracted legal battle with Grayscale.
A court ruling invalidated the SEC’s longstanding resistance to ETFs, clearing the path for forthcoming approvals.
