Coinbase has been authorised by the CFTC to launch regulated XRP futures contracts through its derivatives arm, marking a significant development for institutional access. The futures contracts went live on April 21, 2023. Approval from the CFTC may encourage further crypto derivatives trading while XRP experiences a 67.5% surge in network activity just before the launch, although its spot price has slightly declined amidst cautious investor sentiment.
Coinbase, the largest cryptocurrency exchange in the US, has received regulatory approval from the Commodity Futures Trading Commission (CFTC) for the launch of XRP futures contracts through its derivatives segment. This signifies a critical advancement for institutional access to the XRP altcoin amidst the evolving derivatives market landscape.
Earlier this month, Coinbase announced its intention to introduce regulated XRP futures, having filed for the offering with the CFTC. The company successfully self-certified the product, stating, “We’re excited to announce that Coinbase Derivatives has filed with the CFTC to self-certify XRP futures—bringing a regulated, capital-efficient way to gain exposure to one of the most liquid digital assets.” The contracts went live on April 21, as confirmed by Coinbase.
This approval hints at a swift endorsement from the CFTC, which may lead to increased crypto derivatives activity in the US. The commission has recently aimed to simplify access to this market, as recent reports indicate that the CFTC has relaxed several regulatory barriers that previously limited the entry of traditional and crypto-native firms into the derivatives sector.
XRP showcases high liquidity and a vast user base, making it a strong candidate for derivatives trading. Following the resolution of the Ripple lawsuit, XRP benefits from legal clarity, widespread exchange availability, and a substantial market cap, appealing to institutional investors looking for capital-efficient exposure.
Recent data indicates a significant increase in XRPs network activity, which rose by 67.5% from April 19 to 20, just prior to the launch of Coinbase’s XRP futures. The number of active addresses climbed from 27,352 to 40,366, hinting at increased engagement from both retail and institutional traders, likely in anticipation of the new market opportunities that derivatives provide.
Despite this positive regulatory milestone, XRP’s spot price has seen a 1.26% decline over the past 24 hours. This reflects overall market consolidation and cautious investor sentiment, indicating that while futures can foster liquidity and facilitate price discovery, immediate price movements may not always align with long-term structural changes.
Coinbase’s initiative is part of its broader strategy to establish itself as a regulated entry point for crypto derivatives within the US market. With its futures offerings for Ethereum and Bitcoin already operational, the inclusion of XRP illustrates Coinbase’s confidence in the altcoin’s long-term prospects, despite ongoing regulatory scepticism in the United States.
