As part of its giant expansion project, Coinbase has decided to buy the company FairX. If this deal goes through, the company could give Coinbase the edge it needs to build a derivatives market. As of now, the terms of the agreement have not been disclosed to the public.
US stock exchanges and the derivatives market
“It’s the most important stepping stone for us to help a derivatives market form,” said Brett Tejpaul, head of Coinbase Institutional, in an interview. “We believe the US listed derivatives market presents a very significant business opportunity.”
The derivatives market is a main resource for many companies. For example, outside the United States, companies Binance and OKEx take the lion’s share by offering traders up to 100x leverage. But they are not the only ones to offer this option to their customers. Other companies, like CME Group and Kraken, are doing the same.
Whereas the derivatives market is booming, a few US exchanges are trying to stay away due to the regulatory uncertainties that characterize the sector. On the other hand, some exchanges invite themselves into the market. This is the case of FTX, the competitor of Coinbase. She plans to buy out the parent company of LedgerX LLC.
Coinbase wants to lay its foundations in the sector
Coinbase has been trying to lay its foundations in the derivatives market for several months. Already in September 2021, she had applied to the National Futures Association to register as a futures commission agent. Moreover, at the beginning of last year, it had bought Skew, a company specializing in the field.
Now it’s FairX’s turn to offer Coinbase the opportunity to achieve its goals and speed up the market entry process. Coinbase hopes that through FairX it can connect with other companies to successfully develop its products further. However, it wants to take into account the indications of the regulators. “We want to work with regulators to make sure everything is in place for a launch as soon as possible,” said Tejpaul.
Cryptocurrency exchange Coinbase plans to increase its interventions in the derivatives market. In this context, it wants to buy the company FairX which is already a leader in the field. The formalities for the realization of this project have already begun to be carried out, without being fully disclosed to the public.
Source: Business Standard
Receive a digest of news in the world of cryptocurrencies by subscribing to our new daily and weekly newsletter service so you don’t miss any of the essential Cointribune!
Luc Jose Adjinacou
Far from having dampened my enthusiasm, an unsuccessful investment in 2017 on a few cryptos only increased my enthusiasm. I therefore resolved to study and understand the blockchain and its many uses and to relay with my pen information relating to this ecosystem.
