Coinbase has been allowed to offer perpetual futures to institutional investors overseas since May.
Gabby Jones/Bloomberg
Coinbase
Global said it earned regulatory approval to offer so-called perpetual futures to retail customers outside the U.S., finally giving it an entree into what has grown to be crypto’s largest market.
The trading platform said Coinbase International Exchange, its Bermuda-based entity, had gotten the nod from the Bermuda Monetary Authority to offer the products to retail investors. The futures are typically used as an easy way to make leveraged bets on tokens.
Coinbase (ticker: COIN) in a blog post said its Coinbase Advanced platform would start offering some customers the option to invest in perpetual futures “in the coming weeks.”
Coinbase stock was up about 2.7% to $73.44 in early trading on Thursday. The stock has more than doubled this year.
Derivatives such as perpetual futures have grown to make up the bulk of crypto trading abroad, even as the products aren’t offered to U.S. retail investors. For example, in the past 24 hours on Binance, the largest crypto platform, investors have traded about $5 billion worth of tokens on the spot market and $28.5 billion worth of derivatives.
Unlike typical futures, perpetuals don’t have an expiration date. Their price is meant to closely mirror that of the underlying asset. They have become popular among retail investors because they make it possible to make leveraged bets with less money up front.
Coinbase launched its international exchange in May, allowing non-U. S. institutions to trade perpetual futures contracts. Last month, it received approval in the U.S. to offer federally regulated crypto futures, bringing it into competition with firms that offer traditionally structured futures in
Bitcoin
and Ether.
Thursday’s approval poses a direct threat to Binance, long the king of the crypto perpetual-futures market. Binance has long been under threat from regulators around the globe, and Coinbase in the blog post emphasized its status as a “the most trusted and safest name in crypto.”
Coinbase has faced its own regulatory issues this year. In June, the Securities and Exchange Commission sued Coinbase, alleging that it operated as an unregistered securities exchange, a charge the company denies. This week, Coinbase led a lobbying push in Washington, D.C., attempting to convince lawmakers to pass legislation that executives say would clarify the rules around offering crypto trading in the country.
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