Coinbase Looks to Disrupt Cryptocurrency Trading with Offshore Platform Launch

03/18/2023 19:12 • Digital Disruptors • 89 views

According to reports, two sources said that Coinbase, the cryptocurrency exchange, is exploring the launch of an offshore platform to launch permanent swaps related to cryptocurrencies, as the company hopes to break the status quo of the industry dominated by its competitor, Coinbase. According to people familiar with the matter, Coinbase has briefed market makers and trading companies on plans to launch the platform in offshore jurisdictions, where permanent swap contracts will be included. Derivatives provide traders with a more capital efficient way to bet on the underlying cryptocurrency market.

Source: The proposed overseas platform of Coinbase will provide derivatives trading

Analysis based on this information:

Coinbase, one of the largest cryptocurrency exchanges, is looking to shake up the industry by exploring the launch of an offshore platform to offer permanent swaps related to cryptocurrencies. The move is seen as an attempt to break the dominance of its competitor, with sources indicating the company has briefed market makers and trading companies on its plans to launch the platform in offshore jurisdictions. The goal of the platform is to offer traders a more capital efficient way to bet on the underlying cryptocurrency market.

The use of permanent swap contracts, a type of derivative instrument, is not new in the trading world. These types of contracts essentially allow traders to hedge or speculate on the underlying assets without actually owning them. In the crypto market, these contracts are seen as a way for traders to gain exposure to cryptocurrencies without having to worry about managing wallets or dealing with the complexities of buying and selling the actual currencies.

By launching the offshore platform to offer permanent swap contracts, Coinbase is looking to capitalize on the growing interest in cryptocurrencies and the need for more innovative trading options. The move may also help the company to stay ahead of the curve in a rapidly changing industry that is constantly being disrupted by new technologies and players.

However, launching an offshore platform comes with its own set of challenges and risks. Regulatory scrutiny is likely to be high, especially given the history of the cryptocurrency industry and its association with illegal activities such as money laundering and drug trafficking. Coinbase will need to ensure that its offshore platform is compliant with all relevant regulations and that it has robust systems in place to prevent fraud and other misconduct.

Overall, the move by Coinbase to launch an offshore platform offering permanent swap contracts is a bold move that could shake up the industry and give the company an edge over its competitors. However, it also comes with significant risks and challenges that must be carefully managed to ensure long-term success.

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Coinbase Looks to Disrupt Cryptocurrency Trading with Offshore Platform Launch

Source: The proposed overseas platform of Coinbase will provide derivatives trading

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