Coinbase Launches Offshore Crypto Derivatives Exchange

A US-based Crypto exchange company Coinbase has recently unveiled the launch of its international entity of Crypto Derivatives Exchange in Bermuda as a part of its global expansion strategy. This strategic move comes as the company faces regulatory headwinds at home.

Coinbase's new offshore cryptocurrency entity, named Coinbase International Exchange, will enable non-US institutional users to engage in spot and derivatives trading at the outset. As the first derivatives contracts, Bitcoin and Ether futures contracts are set to be introduced; nevertheless, it is anticipated that additional products will be launched shortly thereafter.

• Perpetual futures contracts, also called perpetual swaps, are financial derivative instruments that enable counterparties to buy or sell assets at an unspecified time. These contracts allow traders to speculate on the asset's price movement without taking ownership of it. Unlike traditional futures contracts, perpetual futures do not have a predetermined expiry date. (Read the Wikipedia article about perpetual futures for further information)

It is set initially that Coinbase will serve institutional traders and market makers who will be offered up to five times leverage. The trades will be settled in USDC, a stablecoin pegged to the US dollar.

These expansions come as the US regulators set restrictions on the industry amid the recent catastrophic events including the downfall of FTX and the subsequent bankruptcy of the US Crypto-friendly banks.

"Rest assured that Coinbase is committed to the US, but countries around the world are increasingly moving forward with responsible crypto-forward regulatory frameworks to strategically position themselves as crypto hubs." Coinbase wrote in a blog post. "We would like to see the US take a similar approach instead of regulation by enforcement which has led to a disappointing trend for crypto development in the US. The Coinbase International Exchange is an expansion, bringing the safest, most trusted name in crypto to the global market."

As a result of these pressures, other cryptocurrency firms are compelled to expand their operations overseas. In response, Gemini has also disclosed its plans to launch an international derivatives exchange.