Coinbase offshore exchange launches this week with Bitcoin and Ethereum futures
Brian Armstrong is the founder and CEO of Coinbase. Bryan van der Beek—Bloomberg/Getty Images
Coinbase will launch its international exchange in the Caribbean nation of Bermuda this week, less than two weeks after the US-based, publicly traded company received regulatory approval from the Bermuda Monetary Authority.
In a blog post published on Tuesday morning, the cryptocurrency exchange said its offshore unit – Coinbase International Exchange – will allow non-US customers to trade in perpetual futures, or financial assets linked to predicted future commodity prices. For now, it will only focus on Bitcoin and Ethereum products, a person familiar with the matter said Fortune.
“Rest assured that Coinbase is committed to the US, but countries around the world are increasingly moving forward with responsible regulatory frameworks to strategically position themselves as crypto hubs,” Coinbase wrote. “We would like to see the United States take a similar approach.”
Initially, the offshore exchange will accommodate market makers and institutional clients, and trading will start as soon as Tuesday, said the person familiar with the matter. Trades will be settled in USDC, the stablecoin pegged to the US dollar that Coinbase developed in partnership with Circle, according to the company’s blog post.
The opening of Coinbase’s Bermuda offshoot comes amid a regulatory crackdown by the US government against crypto backers such as Kraken, Binance, Genesis and Gemini. As regulators have filed lawsuits and issued threats, US-based crypto firms have looked abroad to friendlier places like Hong Kong, Dubai and Singapore. In fact, twins Cameron and Tyler Winklevoss, who are best known for their role in the launch of Facebook and also behind the crypto exchange Gemini, announced on Monday that they are launching their own international exchange in Singapore.
While Coinbase’s announcement on Tuesday was the first public confirmation that it was launching an offshore exchange in Bermuda, there had been previous hints that the company was looking overseas, particularly as the exchange, which often touts its comparative transparency with regulators, has come under the crosshairs of Securities and Exchange Commission.
In March, Bloomberg reported that Coinbase was reaching out to institutional investors about potentially setting up a crypto exchange overseas. The block shortly after reported that the rumored exchange would offer perpetual swaps, a type of future. And just one day before it announced that it had received regulatory approval in Bermuda, Coinbase’s founder and CEO Brian Armstrong warned during a conference that if the US and UK did not implement clear crypto regulations, crypto firms would move abroad to “offshore havens.”
