Coinbase wants to launch futures contracts for these Crypto Assets on April Fools’ Day

Major American cryptocurrency exchange Coinbase plans to start trading futures contracts for Dogecoin DOGE, Litecoin (LTC) and Bitcoin Cash (BCH) on April 1, 2024.

According to several letters filed with the US Commodity Futures Trading Commission (CFTC) earlier this month, Coinbase Derivatives will begin trading monthly cash-settled and futures contracts on or after April Fools' Day.

Futures Trading for DOGE, LTC and BCH

In Coinbase's letters, the firm lists futures contracts using a self-certification approach pursuant to CFTC Rule 40.2(a). This route allows entities to launch new products without direct CFTC approval. But they must ensure that the offers comply with the Commodity Market Rules and Regulations of the Commission.

In the letters, Coinbase Derivatives detailed the description, sizes and structure of the contracts, indicating that the settlement methods will increase the benchmark size at MarketVector.

It started as a joke but has evolved into one of the top memecoins rolling in the major leagues with large cap altcoins and is considered the latest development for Dogecoin.

“Despite its origins as a meme, Dogecoin has achieved a large market capitalization that has made it one of the top cryptocurrencies by market cap at various times. Dogecoin's enduring popularity and active community support suggest that it has transcended its origins as a meme to become a mainstream part of the cryptocurrency world.” Coinbase said in one of its letters.

Commodities with securities futures

Bloomberg analyst James Seifert called Coinbase's move interesting. The Securities and Exchange Commission (SEC) considered that the products were opposed to being classified as commodity futures rather than securities futures.

Seifert explained that since Dogecoin, Litecoin, and Bitcoin Cash are based on Bitcoin, if the SEC classifies it as a commodity, it is difficult to say that the new contracts are securities, especially after the agency's position on BTC transactions. He added that the nature of DOGE, LTC and BCH may be the reason why Coinbase chose them.

“Honestly, if the SEC had just gotten involved with the industry to come up with some rules about this, we wouldn't have activities like this. But at the same time – my work will not be very interesting, “said Siffert.