Key Insights
- •Coinbase submitted crypto regulation proposals outlining how the U.S. should handle crypto derivatives and stablecoins.
- •The crypto exchange stated that stablecoins could reduce certain risks and allow traders to settle positions at any time.
- •Coinbase Premium has recently turned positive after an extended period in negative territory.
Coinbase Calls for Clearer Regulations on DeFi & Stablecoin
In recent crypto news, Coinbase has issued a set of recommendations to the Commodity Futures Trading Commission (CFTC). This submission followed a request for feedback on the President’s Working Group report, with the exchange expressing its readiness to contribute expertise to the creation of relevant crypto regulations.
Faryar Shirzad, Coinbase Chief Policy Officer, shared excerpts from the filing on X. He indicated that the recommendations are based on approaches that have proven effective in other markets, suggesting they can foster innovation while mitigating unnecessary risks.
The submission also details proposals for how the U.S. should manage crypto derivatives, stablecoins, and the increasing number of platforms that offer multiple services concurrently. The exchange urged the regulator to permit new structures that enable customers to benefit from integrated crypto platforms.
Coinbase emphasized that any platform operating with multiple market functions must have robust rules in place to prevent conflicts of interest. The company believes a unified structure can lead to smoother and more cost-effective trading for users, provided these protections are clearly defined. Without such clarity, the industry risks outpacing the development of adequate investor safeguards.
This discussion occurs shortly after the CFTC approved Polymarket's operation as a U.S. exchange. This approval signifies a potential shift in the agency's stance and indicates that regulators are giving more attention to emerging crypto trading models.
Coinbase also encouraged the CFTC to establish a practical regulatory framework for DeFi derivatives. The company highlighted that the DeFi market is experiencing rapid growth and requires regulations that are commensurate with its scale and associated risks, rather than rules designed for older market structures.
Coinbase Views Stablecoin Collateral as a Significant Boost to the U.S. Derivatives Market
The company also highlighted the potential for stablecoins to be used as collateral in the futures market. Coinbase stated that stablecoins could reduce certain risks and provide traders with the ability to settle positions at any time. They pointed to the CFTC's recent initiative to test stablecoin collateral in the U.S. derivatives market as evidence that this concept is gaining traction.
In its submission, Coinbase argued that the use of stablecoins would enhance market liquidity, as settlement would no longer be restricted by traditional banking hours. The company added that adopting this approach could help the United States maintain its competitive edge and secure a leading position in the global derivatives industry.
Coinbase noted that its licensed subsidiaries are already involved in several key market functions, including futures commission merchant services and operating a designated contract market. This experience, according to the firm, provides them with a clear understanding of how digital-asset markets operate in practice. They also argued that any contemporary regulations for crypto should align with the established standards set by the CFTC.
Coinbase Premium Turns Positive
In further crypto news, Coinbase Premium has recently turned positive, marking a notable shift in market dynamics. For the majority of the month, the index had been significantly in the red, indicating a lack of strong demand from U.S. spot buyers. A prolonged period of negative pressure was evident across the chart.
The market sentiment has now changed. As Bitcoin recovered from its recent lows, the premium also began to rebound. This recovery was gradual, with buyers slowly returning and the gap narrowing progressively. The move above zero represents the clearest indication to date that U.S. demand is resurfacing.
Traders closely monitor this indicator for a reason. A positive premium typically signifies that U.S. buyers are willing to pay a slightly higher price compared to other markets, which often occurs when confidence improves. While this does not guarantee a market rally, it does demonstrate that fresh spot interest is being generated once again.
If this premium remains above zero, it provides an additional layer of support for Bitcoin's recent bounce and suggests that the U.S. market is becoming active at a crucial time.