Coinbase rolls out a global exchange to meet the evolving crypto landscape. as more exchanges move offshore.
Coinbase, one of the leading exchanges in the US, has just introduced its new international exchange – Coinbase International Exchange.
The exchange allows institutional users outside the US to trade perpetual futures in Bitcoin (BTC) and Ethereum (ETH) with 5x leverage, settled in USDC.
The move came amid intense scrutiny by regulators in the US.
On the other hand, other markets have increasingly adopted regulatory frameworks to become crypto hubs. This creates a ripe opportunity for Coinbase to expand its services and bring the benefits of crypto to a global audience.
Everyone is Moving Offshore
The new exchange will offer high liquidity markets, dynamic margin requirements, and a robust risk management framework to protect customers, according to Coinbase’s official announcement on the website.
News regarding Coinbase’s establishment of a derivatives exchange has been disclosed since April when the US-based cryptocurrency firm registered to form a subsidiary in Bermuda.
The recent approval of its regulatory license from the Bermuda Monetary Authority (BMA) allows Coinbase to build a global perpetual futures exchange for digital assets that is safe, secure, and transparent. Previously, the crypto exchange solely focused on the US market.
While it is good news for global future trading, the platform is not open to all users. As Coinbase stated, only users who meet the exchange’s requirements can apply to open an account on Coinbase International Exchange.
The SEC is on The Warpath
Coinbase International Exchange offers real-time 24/7 – 365 risk management support, with liquidity provided by external market makers with no proprietary trading connection with Coinbase.
The platform also provides dynamic margin requirements, collateral assessments, and a liquidation mechanism that meets rigorous compliance standards. Coinbase International Exchange is well-capitalized to support tail market events and prevent market fluctuations.
While the exchange is not available to retail customers now, it offers a fantastic opportunity for institutional investors outside of the US to leverage Coinbase’s high customer protection and trading technology standards to achieve their investment goals.
Foster Innovation, Challenge Regulation
In a recent announcement, Brian Armstrong, the CEO of Coinbase, disclosed that the company is considering withdrawing from the US market due to the country’s challenging regulatory landscape.
Speaking at the Fintech London week, Armstrong stated that if the regulatory environment in the US does not improve, the exchange will assess the possibility of a pullback from the market.
This is not the first time Armstrong has voiced his concerns about crypto legislation in the US. In November last year, he argued that the lack of clear regulation from the SEC has caused many US investors to move abroad.
As more countries move forward with responsible crypto-forward regulatory frameworks, the economic powerhouse is expected to follow suit to avoid regulation by enforcement. Coinbase is committed to the US, but the status quo becomes challenging.
In recent years, instead of developing a transparent framework, the US regulators’ approach has been considered overreaching, targeting individuals and organizations in the industry.
The US Securities and Exchange (SEC) has notified Coinbase itself that it is not clear of wrongdoing. In response, the exchange sued the SEC for not providing clear instructions despite being asked many times.
The crypto industry is grappling with increased regulatory scrutiny from the US government.
With the SEC and other agencies cracking down on crypto companies and investors, many in the industry feel pressure. Meanwhile, countries worldwide are increasingly positioning themselves as crypto hubs, and the company wants to bring its trusted name to the global market.
Whether Coinbase will follow through on its threat to withdraw from the US market remains to be seen, but the announcement has undoubtedly added to the growing debate around crypto regulation in the country.