Coinbase is taking strategic steps to enter the derivatives market in the European Union. The company has announced its intention to acquire a Cyprus-based entity holding a MiFID II license, streamlining its entry into the EU’s regulated financial markets.
This move comes as Coinbase aims to offer regulated derivatives, including futures and options, in the EU, a crucial step in its growth strategy.
By acquiring a MiFID II license through this Cypriot firm, Coinbase avoids the complexities of securing individual permissions in each EU state. Derivatives, constituting 75% of total crypto trading volumes, present a significant avenue for Coinbase’s expansion.
This move, however, brings the exchange into direct competition with established players like Binance and OKX. The complexity of financial products like derivatives, deriving their value from other assets, adds both challenge and opportunity to Coinbase’s portfolio.
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Here’s how the acquisition will benefit the traders.
The MiFID II license acquisition enables Coinbase to provide regulated derivatives in the EU market.
Traders benefit from a secure and compliant platform, ensuring a trustworthy environment for trading futures and options.
Coinbase expands investment choices for traders with derivatives, meeting demand for diversified crypto products.
This strategic move aligns with the current market trend, acknowledging the significance of offering diverse financial products in cryptocurrency.
Regulated derivatives provide compliant opportunities for traders in the futures and options market.
Coinbase is a platform for exchanging cryptocurrencies, which was established in 2012. It enables buying, selling, and storing cryptocurrencies. This platform offers an easy-to-use interface and educational materials for individuals interested in trading cryptocurrency. The company is actively expanding globally by securing regulatory approvals in multiple countries. It plans to broaden its service offerings and explore innovative crypto solutions.
Having chosen Ireland as its main EU base in October 2023, Coinbase is gearing up for the forthcoming Markets in Crypto-Assets Regulations (MiCA), with a license application underway. The company secured a license in France in December, reinforcing its international position in the cryptocurrency market.
Acquiring the MiFID II license and navigating EU regulations is pivotal for Coinbase. With this license, Coinbase can “passport” its services across multiple European nations, including major markets like Germany, France, Italy, and the Netherlands.
Coinbase aims to strengthen its position in the global cryptocurrency market by positioning itself strategically as MiCA regulations are expected to be implemented in 2024 for a unified regulatory structure across 27 countries.
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