• Coinbase is launching a crypto derivatives exchange in Bermuda to expand its business internationally.
• The exchange will offer perpetual futures contracts on Bitcoin and Ether with up to five times leverage, settling in USDC.
• Companies are looking offshore due to regulatory hurdles in the U.S.
Coinbase Launches Offshore Crypto Derivatives Exchange
Coinbase, a leading American crypto trading firm, has announced the launch of an international derivatives exchange based in Bermuda as part of their international expansion plan while they face regulatory headwinds at home. The new facility, called Coinbase International Exchange, will initially let traders bet on the price of Bitcoin and Ether via perpetual futures contracts with up to five times leverage and all trades will settle in the stablecoin USDC.
Motivation for Going Offshore
The move comes as a response to regulatory hurdles that are preventing them from operating such activities within the U.S., where deriving trading requires hefty oversight and regulation by enforcement has been “disappointing” for crypto development in the U.S.. In light of this, other U.S.-based crypto companies have also decided to look offshore when it comes to offering derivative trading services.
Gemini’s Similar Move
On the same day as Coinbase’s announcement, Gemini also launched their own international crypto derivatives exchange which is another indication that large firms are looking outside of the United States for places more open and welcoming towards cryptocurrency innovation and businesses.
The Hash Panel Discussion
This news was discussed during a panel discussion on “The Hash” which explored what this could mean for the state of cryptocurrency business operations and regulation in America moving forward given these recent developments from two large industry players like Coinbase and Gemini taking their businesses overseas instead of remaining within domestic boundaries.
Despite regulatory uncertainty surrounding cryptocurrencies domestically within America, two major industry players have taken steps towards expanding abroad into countries that have created more favourable conditions for cryptocurrency businesses to operate under – demonstrating how there may be other options available outside of America if restrictions remain too tight within its own boundaries moving forward into 2021 (and beyond).