Coinbase Derivatives to Launch Futures Trading for DOGE, Litecoin, and Bitcoin Cash
📅 UPDATED: March 20, 2024, 5:26PM EDT 🕒
The memecoin that started as a joke, DOGE, is now getting serious attention. Coinbase Derivatives has announced its plans to introduce futures trading for DOGE, along with litecoin and bitcoin cash. The crypto exchange sent three letters to the Commodities Futures Trading Commission (CFTC) on March 7, stating its intention to launch monthly cash-settled futures contracts for these cryptocurrencies. The letters detailed contract sizes, settlement methods utilizing a benchmark rate by Market Vector, and the structure of the proposed contracts.
Coinbase’s Approach to Listing Futures Contracts
Coinbase is leveraging the self-certification route under CFTC Regulation 40.2(a) to list these futures contracts. This approach allows exchanges to introduce new offerings without waiting for direct CFTC approval. However, they must confirm that the product complies with the Commodity Exchange Act and CFTC regulations.
Regulatory Questions Surrounding Classification
Since DOGE, litecoin, and bitcoin cash all stem from bitcoin, which the Securities and Exchange Commission recognizes as a commodity, their classification as commodities raises interesting regulatory questions. James Seyffart, an ETF research analyst at Bloomberg Intelligence, posted on X.com saying that this development is intriguing. He wonders if the SEC would object to classifying these futures contracts as “commodities futures” instead of “securities futures.” Arguing that they are securities would be challenging due to their origins from bitcoin and considering the recent spot Bitcoin ETF approvals. Therefore, Coinbase’s selection may be strategic.
Hot Take: Coinbase Expanding Offerings to Include DOGE, Litecoin, and Bitcoin Cash Futures
🔥 Coinbase Derivatives is stepping up its game by introducing futures trading for DOGE, litecoin, and bitcoin cash. This move highlights the growing popularity and significance of these cryptocurrencies in the market. It also raises interesting questions about their regulatory classification as commodities. Coinbase’s approach of leveraging self-certification to list these futures contracts demonstrates its commitment to innovation and expanding its product offerings.
Lawrence Lewitinn is the Managing Editor for North America at The Block. With extensive experience as a financial journalist, including stints at CoinDesk, CNBC, TheStreet, Yahoo Finance, the Observer, and Modern Consensus, Lewitinn brings a wealth of knowledge to his role. His career also includes trading fixed income, currencies, and commodities on Wall Street for Millennium Management and MQS Capital. Lewitinn holds an MBA from Columbia Business School and a Master of International Affairs from Columbia’s School of International and Public Affairs. He is also a CFA Charterholder.
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