Coinbase is working on expanding derivatives offerings in the European sector. However, various firms such as Binance, Bybit, Deribit, and OKX are also competing in the same markets. Coinbase has plans to acquire a derivatives trading platform based in Cyprus that has a Markets in Financial Instruments Directive 2014 (MiFID II) license.
This license grants trading permission to the trading platform for governing financial instruments based on updated rules.
Legislators in the EU updated the regulatory parameters of the MiFID II license in 2017 to spread the focus from stocks. At the same time, regulators shifted their attention towards other asset classes such as fixed income, currencies, and derivative contracts.
Coinbase has posted a new blog on this account noting that the firm is going to offer regulated futures derivatives in the region such as licensed futures trading. At present, the firm is offering spot trading for Bitcoin and other cryptocurrencies.
Coinbase to Implement Account Verification Checks
Coinbase officials have retained that the Cyprus-based firm is going to be compliant with Five-point Global Compliance Standard. Such that the firm is going to cover various account verification requirements such as Anti-Money Laundering (AML), Know Your Customer (KYC), and other requirements such as governance standardization, monitoring, reporting, and international sanction implementation.
Coinbase has been working on expanding derivatives offerings that account for 75% of all cryptocurrency trading volume. Coinbase has entered into a highly saturated and competitive market of cryptocurrency derivatives.
Most prominent firms in this sector determine the value of locally offered cryptocurrency derivatives contracts based on the performance of indexes, rates, and underlying assets. At the same time, the firm is opting for global expansion on account of the regulatory constraints within the United States.
Coinbase Selects Ireland as a HQ for European Operations
Coinbase nominated Ireland as the regulatory hub for operations in the EU sector in 2023. The Markets in Crypto-Assets Regulation (MiCA) is the main reason that various cryptocurrency trading platforms such as Coinbase have either exited the region or halted operations on a temporary basis to update their operational framework.
The trading platform has applied for a MiCA license as a single entity and aims to secure it by December 2024 when the MiCA regulatory framework will go into effect.
Coinbase Obtained VASP License in France
At the same time, Coinbase obtained a Virtual Asset Services Provider (VASP) license in France in December 2023. In this manner, the platform has enabled custodial and trading services for digital assets in the European nation.
The trading firm has also acquired trading licenses for more European nations such as Germany, Switzerland, Ireland, and the United Kingdom. Nana Murugesan, VP of Coinbase has noted that the firm has also applied for a trading license in EU nations such as France, Spain, Italy, and Netherlands.
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