Coinbase Applies to NFA to Offer Crypto Futures Trading

Top U.S. cryptocurrency exchange Coinbase has submitted an application to the National Futures Association (NFA) to register as a Futures Commission Merchant (FCM).

Details are sketchy, but the pending application was filed on Sept. 15 under the name “Coinbase Global Inc.”, according to the NFA’s website.

Coinbase highlighted the move in a tweet on Sept. 16, stating that “this is the next step in expanding our product offering and offering futures and derivatives trading on our platform. Goal: further growing the crypto economy.”

If Coinbase becomes an NFA-approved FCM member, the company will then need to register with the U.S. derivatives regulator, the Commodity Futures Trading Commission (CFTC), to obtain approval.

The size of the cryptocurrency derivatives market dwarfs the spot market, and despite a lot of regulatory FUD (fear, uncertainty, and doubt), derivatives have exploded in popularity in 2021. According to CoinGecko, the market processed more than $143 billion in trades in the last 24 hours. Binance, FTX, and Bybit currently lead the 24-hour open interest with $10.1 billion, $6.8 billion, and $3.8 billion, respectively.

The U.S. Securities and Exchange Commission (SEC) has previously threatened to sue Coinbase if it goes ahead with its USDC lending product. Coinbase hopes that its futures and derivatives business will go much more smoothly than its plans to offer a USDC lending product.

Coinbase also sold $2 billion worth of junk bonds this week, The Economic Times reported on Sept. 15, with orders for seven- and 10-year bonds valued at $7 billion.