The cryptocurrency exchange Coinbase announced the launch of Coinbase International Exchange (CIE), an institutional derivatives platform, on May 2, 2023, despite the myriad regulatory difficulties the U.S. crypto sector is currently experiencing. The CIE is anticipated to begin trading next week by announcing the listing of perpetual swaps for ether and Bitcoin. All transactions on the platform will be settled in Coinbase-supported stablecoins, eliminating the need for currency on-ramps.
Coinbase underlined during the launch that institutional clients in qualifying non-U.S. jurisdictions can get direct trading access on CIE via an application programming interface (API). The CIE is currently not available to retail consumers.
According to the press release, Bermudan regulators assisted in the establishment of the new worldwide cryptocurrency network. Late last month, the Bermuda Monetary Authority granted Coinbase a Class F license, allowing it to carry out activities including token sales and issuance, asset derivative provision, and exchange services.
Bermuda’s regulatory structure, according to Coinbase, is famous for its high degree of openness, cooperation and conformity. Bermuda is a parliamentary run, independently governed British foreign territory. In recent years, the country has supported cryptocurrencies and changed its attitude toward the industry, much like the United Kingdom, where cryptocurrency trading is permitted.
Last month, the Bermuda Stock Exchange’s operator, MIAX, acquired the remaining holdings of the shuttered FTX crypto exchange for $50m.
Despite industry woes such as the FTX collapse, Bermuda’s finance minister Edward Burt has stated that the country is still open to cryptocurrencies. Local authorities also indicated last year that the nation would continue to pursue its objectives of developing into a leading cryptocurrency hub despite market volatility in 2022.
The announcement coincides with Citigroup, a leading U.S. investment bank, downgrading Coinbase shares from buy to neutral or high risk and lowering its price goal from $80 to $65. The regulatory ambiguity in the greater crypto business threatens Coinbase, according to Peter Christiansen, Citi’s analyst.
Coinbase shares have lost more than 20% of their value over the past month, falling from around $72 to $50 in the past month. Coinbase had intended to launch a global cryptocurrency exchange in March of last year, but the company received a Wells notice from the SEC. On April 25, 2023, Coinbase reacted by submitting a motion against the SEC, asking the regulator to define industry guidelines.
Gemini, a different crypto exchange, also debuted a platform for non-U.S. derivatives at the beginning of this month. The platform is available in roughly 30 countries, including Thailand, the Philippines, El Salvador, Bermuda, Hong Kong and Singapore, among others. However, it excludes customers from the U.K., the U.S., and the European Union.
As the environment in which crypto companies operate in the United States continues to become more hostile in the light of the SEC’s aggressive stance, many more companies, such as Riot Blockchain Inc. (NASDAQ: RIOT), could find themselves re-evaluating their operations within the country in the same way that Coinbase has.
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