Coinbase US plans to list Shiba Inu futures and 4 other altcoin futures

Coinbase Derivatives exchange has applied to the Commodities Futures Trading Commission (CFTC) to list Shiba Inu futures on its platform. In the application letter dated June 28, 2024, the exchange said it aims to have the futures contract listed by July 15.

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The US-based crypto platform also applied to list futures contracts for four other altcoins, including Polkadot DOT, Stellar’s XLM, Chainlink’s LINK, and Avalanche AVAX. If these applications are granted, the number of regulated crypto futures trading on Coinbase will increase to eight.

Shiba Inu to join DOGE as another memecoin with regulated futures

According to the application, the Shib futures will be a monthly cash-settled and margined contract. It will be sized at 10 million SHIB due to Shiba Inu price and supply, and the minimum tick size and tick value will be $0.00001 per SHIB and $0.10 per contract, respectively.

Shiba Inu will join Dogecoin as another memecoin with a regulated futures contract when listed. Coinbase acknowledged that the token is volatile due to its low market cap and memecoin status but noted that such volatility had been successfully managed in existing products. It stated:

“Since launch, the Exchange has had multiple instances of successful management of high volatility environments in its existing commodity contracts, as Bitcoin volatility was above 4% and Oil volatility was above 5% in 2022.”

Additionally, the application outlined how the futures contract will comply with all the core principles in the Commodities Exchange Act (CEA), including not being readily subject to manipulation and no market disruption. The maximum number of positions in the contract is also limited to 30,000.

Despite the news of an upcoming listing on a regulated exchange, SHIB’s price has fallen by almost 2% today. Notably, blockchain analytical firm Santiment reported that the memecoin is one of the most undervalued digital assets based on average trader returns.

Coinbase adopts self-certification strategy for futures listing

Coinbase is bringing the application under CFTC Regulation 40.2(a). This process allows designated contract markets (DCM) such as Coinbase Derivatives to list commodities products for trading without going through the CFTC vetting system. The DCM must only show that the product does not violate the CEA or any CFTC regulations.

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Using the strategy, Coinbase can list future contracts for crypto products by submitting an application and waiting for the deadline to pass without any objections from the CFTC. The exchange acquired FairX in 2022 and rebranded to Coinbase Derivatives in 2022 before getting approval from the National Futures Association in 2023.