Coinbase will buy U.S. based derivatives platform FairX, which could allow the company to offer crypto derivatives products in the U.S., CoinDesk reported Wednesday (Jan. 12).
That would be a shift from the current situation, where only a few exchanges let U.S. investors to trade bitcoin and ether futures. Cash-settled products have usually been the most popular, and longest-available, products.
FairX is a designated contract market and is registered with the Commodity Futures Trading Commission. That lets it offer futures products in the U.S.
In addition, Coinbase is an applicant to the National Futures Association, which is a self-regulatory organization looking over derivatives platforms in the United States.
“The development of a transparent derivatives market is a critical inflection point for any asset class and we believe it will unlock further participation in the cryptoeconomy for retail and institutional investors alike,” Coinbase said in a blog post Wednesday.
The report notes that FairX is a fairly new platform, rolling out initially in May 2021. It got regulatory approvals a few months before that, in late 2020.
The company also has relationships with several brokerages including TD Ameritrade, E*Trade, ABN AMRO, Wedbush, Virtu Financial and others that have used FairX’s futures products or provided clearing services, the report says.
Coinbase users in more than 70 countries recently got the ability to tap the competitive yields of decentralized finance (DeFi) lending on their Dai, a feature coming with no fees, lockups or set-up trouble.
DeFi lets people borrow, lend and trade without the need for a centralized intermediary. High yields have made lending very popular and there’s an estimated $51 billion in DeFi lending protocols.
Coinbase has been working on making affordable and seamless DeFi protocols, hoping to create a user-friendly experience while doing away with network fees.