Coinbase Expanding in the EU with Derivatives Acquisition
Coinbase has announced its plans to enter the European Union (EU) market by offering crypto-linked derivatives. The company has entered into an agreement to acquire a holding company that possesses a MiFID II license, according to CNBC. MiFID II is an updated EU regulation that governs financial instruments and includes derivatives.
This move aligns with Coinbase’s goal of catering to professional and institutional customers. If the acquisition is successful, it will mark Coinbase’s first venture into derivatives trading in the EU. With the MiFID II license, Coinbase will be able to provide regulated derivatives like futures and options to customers in select EU countries.
The acquisition is subject to regulatory approval, but Coinbase expects the deal to close later this year.
Derivatives Trading Dominates Crypto Trading Volume
Derivatives trading holds significant importance for Coinbase as it accounts for 75% of overall crypto trading volumes. While Coinbase faces competition from larger players like Binance in the crypto derivatives market, it aims to establish itself in this crucial sector.
Currently, Coinbase does not offer crypto derivatives products in the UK due to regulatory restrictions. However, it provides futures trading for bitcoin and ether in the US and other markets outside the US.
Coinbase’s International Expansion Efforts
Coinbase’s move into derivatives follows its recent expansion efforts outside of the US. Facing regulatory challenges at home, including a lawsuit from the US Securities and Exchange Commission, Coinbase has been pursuing growth opportunities internationally.
The company has chosen Ireland as its primary regulatory base in the EU and has applied for a single MiCA license to comply with upcoming crypto laws. Additionally, Coinbase has obtained a virtual asset service provider license in France, enabling it to offer custody and trading services for crypto assets in the country.
Overall, Coinbase’s entrance into the derivatives market in the EU demonstrates its commitment to expanding its presence and offerings globally.
Hot Take: Coinbase Takes a Major Step Towards EU Expansion
Coinbase’s decision to offer crypto-linked derivatives in the EU through the acquisition of a MiFID II license holding company is a significant move towards expanding its presence in the region. By entering the derivatives market, Coinbase aims to cater to professional and institutional customers, who are crucial for driving trading volumes. While regulatory approval is still pending, Coinbase’s entry into this space could position it as a key player in the EU’s growing crypto market. This move also aligns with Coinbase’s strategy of pursuing international growth opportunities amid regulatory challenges in its home country. Overall, this acquisition showcases Coinbase’s commitment to providing innovative and regulated products and services to its global user base.
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