In Breif:
- Coinbase submits a file with the National Futures Association to start futures trading on their platform.
- Futures contracts allow traders to trade with a predetermined value in future.
- Presently, Binance is the prominent platform for future trading.
Coinbase announced that it has filed with the National Futures Association (NFA) to become a registered futures trading platform. It plans to broaden its product range.
Coinbase filed the application on Wednesday, if approved then they will file with CTFC. By doing so, they will become an approved FCM member under NFA.
This filing indicates that the exchange doesn’t want to limit itself to mere spot trading. Exchange is planning to enter the business of derivatives trading, where people can bet on the future prices of assets. The future trading concept is the most popular among skilled traders.
According to the tweet from Coinbase, “this move is the next step to broaden our offerings and offer futures and derivatives trading on our platforms.” It is known that earlier this month, US regulators had warned Coinbase regarding this product.
Currently, Binance is the biggest platform for future trading and derivatives.
Mainly derivatives include futures and options contracts. Future contracts allow people to buy and sell cryptocurrency in the future at a specific time. Options contracts also work in the same manner. Here, traders can buy or sell cryptocurrency at a predetermined value.
Coinbase files for the futures trading options following SEC’s threat to sue the exchange over its Lend feature. However, Coinbase CEO responded to the threat calling SEC’s behaviour “Sketchy”.
