Coinbase, the prominent U.S. cryptocurrency exchange, has disclosed its plans to acquire an unnamed holding company, signaling a significant move to venture into the European Union's regulated derivatives market.
The purchase involves a company holding a MiFID II license, a critical asset enabling Coinbase to introduce regulated derivatives such as futures within the EU. This step complements the platform's current offering of spot trading in cryptocurrencies, further amplifying its market presence, according to report CNBC.
MiFID II, governing financial instruments across the EU, serves as the cornerstone for Coinbase's expansion into professional and institutional clienteles. The endeavor aligns with the company's continuous efforts over the past 12 years, striving to serve institutional players like hedge funds and high-frequency trading firms by facilitating larger transaction sizes.
While the completion of the acquisition is subject to regulatory approval, Coinbase envisions this maneuver as a pivotal step to commence derivatives trading in the EU, signifying the platform's debut in this specific market segment.
Derivatives hold a substantial portion of the crypto trading landscape, accounting for an estimated 75% of total trading volumes. While Coinbase's entry into this domain signifies a significant leap, it faces stiff competition, particularly from industry giants like Binance, Bybit, OKX, and Deribit.
The move into derivatives reflects Coinbase's strategic expansion beyond its U.S. stronghold. Despite facing regulatory challenges domestically, Coinbase has set its sights on international markets, exemplified by its aggressive pursuit of a regulatory base in Ireland and the recent acquisition of a virtual asset service provider license in France.
Coinbase's foray into the EU derivatives market underscores its ambitious global aspirations, positioning itself as a key player in the rapidly evolving landscape of digital asset trading.