Coinbase Clears Hurdle for Fully Collateralized Derivatives Contracts

The Commodity Futures Trading Commission (CFTC) has approved Coinbase's clearinghouse for fully collateralized contracts. This move allows Coinbase to create and settle its own derivatives products, which will be settled in USDC stablecoin and available 24/7.

Coinbase already operates a futures exchange and a futures broker, but the CFTC approval completes its end-to-end derivatives infrastructure. The clearinghouse is limited to fully collateralized futures, options on futures, and swaps, meaning that traders will need to hold enough money to cover potential losses at all times.

Coinbase's general counsel, Molly Abraham, said in a statement that the new entity is 'the first USDC-native clearinghouse' and will enable the company to bring more regulated derivatives products to market. However, the approval does not extend to Coinbase's leveraged business, which will continue to rely on existing partners for margined derivatives and single-stock perpetual futures.

The CFTC has also imposed conditions on the order, allowing it to modify or terminate the terms of the approval at any time.