Coinbase, the largest crypto exchange in the United States, has announced the launch of a new trading platform for institutional clients outside the US. The new platform, called Coinbase International Exchange, will offer perpetual futures contracts for Bitcoin (BTC) and Ethereum (ETH), the two largest digital assets by market capitalization.
Perpetual futures are a type of derivative contract that allow traders to bet on the price movements of an underlying asset without an expiration date. They are widely used in the crypto space to hedge against volatility, leverage positions, and speculate on market trends. According to Coinbase, perpetual futures accounted for nearly 75% of global crypto trading volume in 2022.
Coinbase Will Work with Bermudan Regulators
Coinbase International Exchange will work with the Bermuda Monetary Authority (BMA), which is one of the most progressive and crypto-friendly regulators in the world. The BMA has established itself as an agency that promotes transparency, compliance, and cooperation.
The decision to work with foreign regulators is not surprising since the U.S. is making it hard for the crypto industry to do business in the country. Regulators have made it clear that digital assets come with risks that need to be mitigated. Coinbase is just one of the crypto companies threatened with regulatory actions for alleged infractions.
Features of Coinbase International Exchange
The exchange differentiates itself from its competitors by leveraging its reputation as a safe, secure, and compliant platform that adheres to high standards of customer protection and risk management. The company claims the following features:
- Real-time 24/7 risk management
- Liquidity provided by external market makers
- Dynamic margin requirements and collateral assessments
- A liquidation framework that meets rigorous compliance standards
- Well-capitalized exchange to support tail market events.
- All trades are settled using USDC.
- Traders have the option to use up to 5x leverage
- BTC and ETH contracts seem to be the only options for now
- All trades are settled using USDC
Unfortunately, Coinbase International Exchange is only open to institutional investors for now. Retail customers are not eligible for the time being.
Crypto Capital is Going to Friendlier Countries
The U.S. government’s siege on crypto is forcing companies to relocate outside the country. There is even an apparent effort to de-bank the industry. Digital asset developers and investors have no choice but to look for jurisdictions that will treat them better. This is a loss to the U.S. and members of Congress are noticing the drawbacks of the government’s hostile stance against crypto. The lawmakers recognized that regulatory overreach is chasing capital away. And these capitals are being welcomed in other countries. Retail investors, who are supposed to be protected, are being excluded from the digital assets industry.
Crypto was made to be the future of finance and other countries recognize this. Jurisdictions like Bermuda, Dubai, and Hong Kong are reaping the rewards of having fair and rational crypto regulations. Coinbase is not the first crypto company to move capital to another country and it won’t be the last. Capital outflow will continue unless the government recognized crypto as a tool with potential, instead of a risk to be eliminated.
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