Coinbase has begun the regulatory process to launch perpetual futures that track the prices of individual stocks for U.S. retail investors. The move marks a significant expansion by the cryptocurrency exchange into derivatives linked to traditional financial assets such as stocks.
According to foreign media reports on Sept. 3, Coinbase filed application documents with the U.S. Securities and Exchange Commission (SEC) this week related to single-stock perpetual futures products. Coinbase plans to complete the necessary procedures with the U.S. Commodity Futures Trading Commission (CFTC) following the SEC filing.
Coinbase aims to launch the products in the U.S. by the end of the year, pending the necessary regulatory approvals. If the plan comes to fruition, U.S. retail investors will be able to invest in perpetual futures that track movements in individual stock prices.
Unlike conventional futures, perpetual futures are derivatives that can be traded without a fixed expiration date. Investors can bet on an underlying asset’s price rising or falling without directly owning the asset, and can also use leverage.
Coinbase has operated the related business overseas ahead of its U.S. market entry. Since early this year, it has offered single-stock perpetual futures to customers outside the U.S. and is seeking to expand the service to the U.S. retail investor market through the regulatory process.
Competition is also intensifying in the derivatives market spanning traditional and crypto assets. Prediction market platform Kalshi has received CFTC approval for Bitcoin (BTC) perpetual futures and is preparing products linked to stock indexes and other assets. CME Group also launched single-stock futures in July based on the shares of about 50 major U.S. companies.