Coinbase Eyes European Expansion with Derivatives Offering, Awaits Regulatory Approval
Summary:
Coinbase plans to enhance its derivatives offerings in the EU by purchasing a MiFID-licensed entity in Cyprus, pending regulatory approval. With a MiFID II license, Coinbase can offer regulated derivatives like futures and options. The acquisition adheres to its Five-point Global Compliance Standard and is expected to be finalized by 2024. Despite stiff competition, Coinbase is positioning itself for international growth amidst challenges at home, including a lawsuit from the U.S. Securities and Exchange Commission. It has identified Ireland as its main EU regulatory hub, expecting to secure a single MiCA license by December 2024. Coinbase also obtained a license to offer custody and crypto trading in France.
Coinbase is setting its sights on enhancing its derivatives offerings within the European Union through the purchase of a MiFID-licensed entity in Cyprus. This acquisition, still awaiting official sanction, will fortify Coinbase’s market position by 2024. The legislation known as MiFID II, outlines the EU's freshly revised regulations for financial instruments. Revised in 2017, these new laws were established to overcome the critique of being overly averse to stocks and not considering other asset categories like fixed income, derivatives, and currencies. A post from Coinbase's blog states that a MiFID II license would allow it to provide regulated derivatives such as futures and options in the EU. The brand currently facilitates spot trading for Bitcoin and additional digital currencies. Finalization of the deal depends on regulatory approval, hoping to be concluded by 2024. To obtain the organization, Coinbase has adhered to its Five-point Global Compliance Standard, which includes Anti-Money Laundering (AML), Know Your Customer (KYC), global sanctions, and governance. This five-point global benchmark maintains compliance and integrity for the cryptocurrency market operations. Derivatives, a crucial part of Coinbase's strategy, make up to 75% of overall crypto trading volumes. Notwithstanding its ambitions, Coinbase will confront substantial competition from larger entities such as Binance, Bybit, OKX, and Deribit. Derivatives are financial tools that determine their value based on an underlying asset, index, or rate's performance. In related news, Coinbase Custody has seen a leadership exchange awaiting the Bitcoin ETF decision. Following struggles in its native industry, Coinbase has actively worked towards international growth. The company is currently under scrutiny from the U.S. Securities and Exchange Commission for alleged violations of securities laws. In October, it identified Ireland as its main regulatory center within the EU, expecting new cryptocurrency regulations, termed as Markets in Crypto-Assets (MiCA). Coinbase is striving to secure a single MiCA license by December 2024 to align with the EU's complete enforcement of these norms. In December, Coinbase was granted a license for providing virtual asset services by France, allowing them to offer custody and crypto assets trading within the nation.
Published At
1/6/2024 10:17:26 AM
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