Coinbase’s international exchange opens futures to retail

Coinbase is expanding its perpetual futures service to non-US retail users after seeing substantial institutional trading of over $5.5 billion in notional volume during the second quarter.

A Bermuda regulator granted Coinbase International Exchange the authority to offer perpetual futures to eligible non-US retail clients, according to an announcement on Thursday.

Coinbase initially launched perpetual futures trading in May, but it was limited to only institutional investors located outside the US. 

Starting Sept. 28, non-US retail traders can verify their eligibility for perpetual futures trading on Coinbase Advanced, with actual trading set to commence in the following weeks, the announcement said.

“At a time when other crypto exchanges are backing away from various regions due to increased scrutiny from local regulators, this regulatory approval highlights Coinbase’s commitment to working with local regulators to ensure its retail and institutional offerings are compliant with local frameworks and standards,” Coinbase said in an email.

The Coinbase International Exchange, which provides the service, maintains financial backing through its Insurance Fund and Liquidity Support Program, both funded in USDC, rather than relying on an exchange token, the company said.

Liquidity for the platform is sourced from compliant, independent liquidity providers, it added.

Coinbase is looking to reduce its dependency on spot trading revenues, which, in the past, have negatively impacted its stock performance following disappointing quarterly earnings.

Notably, perpetual futures trading makes up a substantial portion, up to 75%, of the overall global cryptocurrency trading volume, according to the exchange.

The firm is also seeking to spread risks related to regulatory uncertainties. 

This strategic shift underscores Coinbase’s efforts to evolving within the changing crypto market dynamic and achieving a balanced revenue mix.

Coinbase joins a handful of other centralized exchanges to offer such contracts including the likes of Deribit, Binance, Bitfinex, among others, as well as a growing number of DeFi derivatives options, such as dYdX and Aevo.

---

Get the news in your inbox. Explore Blockworks newsletters:

• Blockworks Daily: The newsletter that helps thousands of investors understand crypto and the markets, by Byron Gilliam.
• Empire: Start your morning with the top news and analysis to inform your day in crypto.
• Forward Guidance: Reporting and analysis on the growing intersection of crypto and macroeconomics, policy and finance.
• 0xResearch: Alpha directly in your inbox. Market highlights, data, degen trade ideas, governance updates, token performance and more.
• Lightspeed: Built for Solana investors, developers and community members. The latest from one of crypto’s hottest networks.
• The Drop: For crypto collectors and traders, covering apps, games, memes and more.
• Supply Shock: Tracking Bitcoin’s rise from internet plaything worth less than a penny to global phenomenon disrupting money as we know it.