Coinbase announced the opening of its new global exchange, the Coinbase International Exchange. This article covers what the exchange is and what sets it apart from the historical Coinbase exchange.
It’s official: On May 2, Coinbase declared the opening of a brand-new global exchange. This address can be used to contact it, which goes by the name Coinbase International Exchange. But it is not a replica of the previous historical exchange; rather, it is something new.
Pitfalls with Coinbase and the US
A US firm named Coinbase is listed on the Nasdaq stock market. Its ability to grow is therefore constrained because it must closely abide by stringent American restrictions.
Additionally, the SEC is currently looking into Coinbase to see if it permitted the exchange of unregistered securities.
In other words, the American company’s relationship with American authorities is troublesome right now, to the point where it has threatened to quit the country.
The fact that the new Coinbase International Exchange appears to be governed by the Bermuda Monetary Authority (BMA), which the exchange describes as “a highly respected and experienced financial regulator, led by an exceptional executive team and board of directors,” rather than the Securities and Exchange Commission (SEC), is thus no coincidence.
The BMA is a member of numerous international organizations and has close contacts with other regulators across the world, according to the business, who also notes that Bermuda’s regulatory environment is known for high levels of transparency, compliance, and cooperation.
This is a first step towards internationalization, which entails opening up to other jurisdictions, rather than a departure from the United States.
The new transaction
The new exchange, however, is in no way a carbon copy of the earlier exchange specifically for non-U.S. markets.
Perpetual futures, which are financial goods absent from the conventional form, are the only ones now permitted for trade on the Coinbase International Exchange.
Although everyone has access, it is currently only available to financial institutions upon special request.
Existing Coinbase accounts can already log in to the new exchange using their existing credentials, but unless they have requested and been activated, they will be redirected to the previous exchange when they do so.
As a result, these two trades are distinct from one another.
Spot markets and retail clients can keep using the previous platform, but non-U.S. institutional clients who want to trade BTC and ETH futures must switch to the new one. Furthermore, fiat currencies are still not supported on the Coinbase International Exchange, where all trades are conducted in USDC.
This move appears to be the first step toward the actual threat of leaving the US, though.
It must be acknowledged that some exchanges, like Binance or the defunct FTX, offer separate platforms for the US and the rest of the world.
The historical platform is still the one on which Coinbase’s spot markets and retail clients currently operate, but it is possible that eventually the new international version will also establish spot markets specifically for non-U.S. retail consumers.
FTX, on the other hand, was a U.S. exchange as well, but it had established its headquarters in the Bahamas and ran various platforms aimed at various markets from there.
It makes no sense to expose overseas clients to such restrictions given that US standards are frequently stricter. Thus, it makes more sense for cryptocurrency exchanges that cater to both domestic and international customers to have multiple platforms, each of which has the same restrictions as the particular jurisdictions to which they are dedicated.
The Coinbase International Exchange is currently a niche platform targeted at a particular market and client base, but it is possible that in the future it will only serve users outside of the United States.
Although Coinbase’s main market is the US, the US exchange is also used extensively abroad.
On the stock market, Coinbase
On the Nasdaq, Coinbase’s shares increased 2.3% yesterday, closely matching the price of Bitcoin at the closure of U.S. exchanges.
Coinbase’s shares has appreciated less than bitcoin in 2023, with a cumulative gain of under 54%.
This may seem like a big gain for a publicly traded stock, but bitcoin rose 72 percent and Coinbase fell 86 percent by 2022.
In 2022 and 2023, Coinbase’s share price fell more than bitcoin’s.
In other words, the company’s stock isn’t performing all that well on the stock market despite the +54% in 2023. The fact that it dropped from its initial listing price of $380 in April 2021 to approximately $51 yesterday should enough. With the exception of a few instances where it showed a timid return, its medium- to long-term tendency has so far generally been downward.
In addition, it has lost close to 29 percent of its value since its peak in mid-April, whereas bitcoin has lost only 8 percent.
Such information demonstrates that the company’s current strategy does not appear to be very effective.