On September 28 local time, the U.S. Commodity Futures Trading Commission approved Coinbase Clearing LLC, a subsidiary of crypto-asset exchange Coinbase, for registration as a Derivatives Clearing Organization, or DCO. A clearinghouse steps between the parties to an executed trade, becoming the seller to the buyer and the buyer to the seller and assuming the payment obligations of both sides.
The approval allows Coinbase Clearing to clear fully collateralized futures, options on futures, and swaps. Under a fully collateralized structure, each party deposits at the outset the entire amount it could be required to pay under the contract, eliminating the need for additional margin or settlement payments later. Coinbase Clearing may clear only products that meet this condition.
Coinbase said the new clearinghouse is designed to accept the dollar stablecoin USDC as collateral and settle transactions 24 hours a day, every day of the year. Together with its existing futures commission merchant, Coinbase Financial Markets, and derivatives exchange, Coinbase Derivatives, the group now has the foundation to connect brokerage, trading, clearing, and settlement for fully collateralized products within its own organization.
The company expects the in-house clearinghouse to accelerate product development and improve operational efficiency. However, leveraged derivatives that require only partial margin, as well as its planned single-stock perpetual futures, will continue to use existing external clearing partners.