US crypto exchange Coinbase has received government approval to offer Bitcoin (BTC) and Ethereum (ETH) futures in the US.
In a new company blog post, Coinbase says it has received the green light from the National Futures Association (NFA) to operate a futures commission merchant (FCM) and offer eligible U.S. traders BTC and ETH futures products.
FCMs are federally regulated entities that offer and accept futures contracts related to securities and commodities.
“In September 2021, we applied to the NFA to register an FCM. Our team has since worked with regulators to ensure we will comply with all necessary regulations and that our FCM business model meets CFTC (Commodity Futures Trading Commission) requirements for customer protection…
Today, we are pleased to announce that approval has been obtained, allowing eligible US clients to access regulated derivative products through Coinbase Financial Markets and in addition to our spot market for a seamless experience overseen by the CFTC and the NFA.”
According to the blog post, Coinbase will be the first crypto company to offer both traditional spot market trading and federally regulated crypto futures.
The crypto exchange further emphasizes the significance of the milestone, saying that derivatives contracts will broaden access to digital assets and allow traders to better manage risk.
“The global crypto derivatives market represents ~75% of the crypto trading volume worldwide and is a critical entry point for traders. The ability to trade on margin gives clients leverage and access to the crypto market with less upfront investment than traditional spot trading.
Because they can take long and short positions, investors are also using derivatives to manage risk on their underlying crypto assets.”
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