- Coinbase urges CFTC modernisation of U.S. crypto rules to support DeFi, stablecoins, and new derivatives markets.
- Calls for transparent oversight for derivatives and multi-market platforms while ensuring robust safeguards for users.
- DeFi derivatives need unique rules, as traditional regulations can’t adequately govern trustless, code-executing protocols.
Coinbase has officially called for the Commodity Futures Trading Commission (CFTC) to modernise critical elements of US crypto regulations because these regulations are antiquated and impede the development of decentralised financing (DeFi), stablecoins, and new derivative markets.
The exchange has submitted recommendations to address the CFTC’s public comment request that was related to the President’s Working Group report on digital assets. Faryar Shirzad, the Chief Policy Officer at Coinbase Exchange Group INC., posted updates about the letter on X with an emphasis on how these recommendations address action items that increase safety within markets while fostering innovation.
Coinbase Calls for Transparent Derivatives Oversight
According to Coinbase, US crypto regulations need to account for the way markets function in 2025,” especially with new trading models on the rise. It proposes that there should be a clear but agile regulatory system for derivatives markets, stablecoins, and entities that combine more than one type of market facility.
Although these kinds of platforms can offer efficiency and cost savings for their customers, these platforms need to contain robust safeguards, according to Coinbase. The company calls upon the CFTC to legalise these kinds of models once they offer transparency on oversight and avoid conflicts of interest. According to the letter, this will ensure that innovations successfully coexist with risk safety for those involved.
These recommendations were made not so long after the CFTC cleared Polymarket to operate as a futures exchange in the US; this was an indicator that regulators were ready to accept different forms of crypto trading platforms. According to Coinbase, this development marks progress, but more guidance should be provided to stay abreast of market developments.
DeFi Derivatives Need New Rules
According to Coinbase, “DeFi derivatives cannot be properly regulated under regulations applicable to traditional intermediaries,” because decentralised protocols with technologies like code-execution trustlessness require a functional regulatory paradigm which balances protecting users with allowing technological evolution.”
The company points out that “the CFTC is well-positioned to create such rules.” Without specific guidance, it could negatively impact innovation because “innovation could migrate overseas, leaving Americans vulnerable to risk.”
The other important proposal would be to permit regulated stablecoins as collateral in futures markets in the United States. Coinbase emphasises, stablecoins could increase “liquidity and facilitate 24/7 settlement,” which can not be provided by traditional collateral types.
Coinbase cites that “the CFTC has expressed interest in stablecoins related to derivatives clearing,” adding that “the creation of rules could alleviate risks while increasing leadership within the US market.” Its regulated subsidiaries offer experience with derivatives oversight.
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Coinbase Urges Updated Crypto Regulations
While urging an update to regulations, Coinbase complimented the CFTC’s principles-based regulatory model and their openness to innovative models and cooperation with the SEC with regard to overlapping regulations.
Coinbase explains, it’s important to allow dialogue between regulators and the industry to drive positive growth for DeFi markets and derivatives markets.
While Washington continues to debate how it wants to regulate digital assets moving into the future, Coinbase’s proposal represents just the latest effort that’s been made to establish rules for crypto’s future evolution. It’s probably going to be years before the eventual regulations set by Washington shape how crypto and traditional markets intersect in the future.
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