Coinbase Derivatives has unveiled plans to introduce cash-settled futures contracts for Dogecoin, Litecoin, and Bitcoin Cash.
Announced in letters to the United States Commodity Futures Trading Commission (CFTC) on March 7, this initiative marks a significant expansion of Coinbase’s product line, aiming for an April 1 launch date.
What is Coinbase’s Strategy With Futures Listing
The filing flew under the radar initially, escaping widespread community attention. Currently, the CFTC’s response remains pending. However, if no objections arise, these futures, including a Dogecoin Futures ETF, will commence trading by April Fool’s Day.
Importantly, Coinbase has opted for self-certification under CFTC Regulation 40.2(a), a move that accelerates the listing process by circumventing direct CFTC approval.
Transitioning into regulatory navigation, Coinbase’s acquisition of the CFTC-regulated FairX derivatives exchange in 2022 laid the groundwork for these developments. By August 2023, the firm had already obtained approval for regulated futures trading in the US, notwithstanding the SEC’s investigative glare.
Read more: Best Crypto Derivative Exchanges in 2024
Following the announcement, Dogecoin, Litecoin, and Bitcoin Cash experienced significant price increases, highlighting market receptivity. The choice to list Dogecoin futures is emblematic of the asset’s evolution from a meme to a major crypto asset.
“Dogecoin’s enduring popularity and the active community support suggest that it has transcended its origins as a meme to become a staple of the cryptocurrency world,” Coinbase wrote.
Market observers are interpreting Coinbase’s move as a potential strategy to influence SEC rulemaking. This initiative could redefine the regulatory dialogue surrounding crypto assets. Analysts suggest that by securing a commodity futures classification for these cryptocurrencies, Coinbase is challenging the SEC’s securities designation.
Bloomberg analyst James Seyffart speculated on social media about the filings’ strategic nature. He posited that they might be aimed at compelling the SEC to align its classification of proof-of-work crypto assets with that of Bitcoin, thereby avoiding the “securities” label.
Read more: Crypto Regulation: What Are the Benefits and Drawbacks?
“Honestly. If the SEC would just engage with the industry on making some rules about this stuff, we wouldn’t have moves like this,” Seyffart said.
Disclaimer
In adherence to the Trust Project guidelines, BeInCrypto is committed to unbiased, transparent reporting. This news article aims to provide accurate, timely information. However, readers are advised to verify facts independently and consult with a professional before making any decisions based on this content. Please note that our Terms and Conditions, Privacy Policy, and Disclaimers have been updated.
