- Coinbase Derivatives plans to launch XRP futures on April 21, pending CFTC approval.
- XRP futures could enhance liquidity and draw institutional interest in regulated derivatives.
- SEC’s policy shift fuels confidence in U.S. crypto derivatives and XRP investment products.
Coinbase Derivatives is seeking to self-certify XRP futures with the U.S. Commodity Futures Trading Commission (CFTC). The contracts will go live on April 21, if no objections come up during the review period.
The move comes in the wake of greater regulatory clarity in regards to XRP, after the U.S. Securities and Exchange Commission’s (SEC) decision to drop its appeal in the long-running case against Ripple. This shift has enabled Coinbase to bring out XRP futures under a regulated framework as the second U.S. regulated platform after Bitnomial.
Coinbase Expands Regulated Crypto Futures Offerings
Coinbase Derivatives’ decision to list XRP futures aligns with its broader strategy of expanding access to regulated cryptocurrency derivatives. So far, the firm has previously introduced futures contracts for Bitcoin (BTC), Ethereum (ETH) and Litecoin (LTC). In 2023, it also allowed XRP perpetual futures on its international exchange but US traders could not use the products.
Coinbase is using its status as a designated contract market (DCM) to self-certify the XRP futures contract. This allows for the creation of new futures products without having to seek direct approval from the CFTC provided that regulatory requirements are met. Regulated exchanges often use this process when introducing new derivative products.
Market Impact and Institutional Interest
The introduction of regulated XRP futures could expose institutional and retail investors to structured trading of the asset. XRP Futures contracts will allow traders to hedge against price volatility or speculate on price movements which might boost liquidity and thus volume on the trading of XRP.
Coinbase’s filing also comes at the time of institutional interest in XRP-related financial products. A number of asset managers such as Bitwise, WisdomTree, CoinShares and Grayscale have filed with the SEC for spot XRP exchange-traded funds (ETFs). According to experts, the regulatory progress around XRP could give rise to the approval of these investment products.
Coinbase Derivatives also recently added Solana (SOL) and Hedera (HBAR) futures to its offerings in addition to XRP futures. Later this month, the company is also waiting for regulatory approval on Cardano (ADA) and Natural Gas (NGS) futures contracts.
At press time, XRP was trading at $2.06, a 0.69% increase in 24 hours. The market cap has also slightly increased by 0.75% to $120.51B while 24h trading volume has decreased 28.9% to $4.87B.
Broader Regulatory Shift
XRP futures introduction follows a changing regulatory landscape in the United States. Acting SEC Chair Mark Uyeda has taken a more constructive approach toward cryptocurrency regulation, opting to drop several enforcement actions against industry players, including Coinbase itself.
Such a change in stance has also increased the confidence in U.S.-based digital asset products, setting exchanges like Coinbase to step up their regulated derivatives offerings. As XRP now receives increased institutional interest, the listing of the futures contract of its tokens could represent one of the major steps forward for the broader cryptocurrency derivatives market.
