Coinbase International Exchange debuts as SEC intensifies cryptocurrency enforcement in the United States.

As the cryptocurrency sector encounters regulatory hurdles in the United States, the public crypto exchange Coinbase is advancing with a global derivatives platform.

On May 2, Coinbase revealed the introduction of the Coinbase International Exchange (CIE), a new institutional platform aimed at crypto derivatives trading.

The CIE will commence trading by offering Bitcoin (BTC) and Ether (ETH) perpetual futures later this week. All transactions on the CIE will be settled in Coinbase-backed stablecoin USD Coin (USDC), eliminating the need for fiat on-ramps.

Coinbase emphasized that direct access trading on the CIE is available to institutional clients through application programming interface in eligible, non-U.S. regions. “These products are not available to retail customers at this time,” Coinbase stated.

As per the announcement, the new international crypto platform has been launched with the backing of regulators in Bermuda. As previously noted, Coinbase secured a license from the Bermuda Monetary Authority (BMA) by mid-April 2023. The Class F License permits Coinbase to function as a digital asset exchange and a digital asset derivatives exchange provider, as well as engage in activities such as token sales and issuance.

Coinbase highlighted that Bermuda’s regulatory framework is recognized for its “high level of transparency, compliance and cooperation.”

Bermuda is a self-governing British overseas territory with a parliamentary system. Similar to the United Kingdom — where cryptocurrencies are currently permitted — Bermuda has been supportive of crypto, becoming increasingly optimistic about the crypto sector recently.

In late April, Miami International Holdings, the operator of the Bermuda Stock Exchange, acquired remnants of the defunct FTX crypto exchange. The firm purchased FTX’s futures and options exchange, along with the clearinghouse LedgerX for $50 million.

Previously, Bermudan Premier and Finance Minister Edward Burt stated that the government remains receptive to crypto despite setbacks in the industry like FTX. Last year, local authorities also indicated that Bermuda would maintain its aspirations as a crypto hub despite the sector experiencing a significant bear market in 2022.

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This announcement arrives as major U.S. investment bank Citigroup downgraded Coinbase shares to neutral or high risk from buy or high risk, with a price target of $65, reduced from $80. According to Citigroup analyst Peter Christiansen, regulatory uncertainty in the wider cryptocurrency landscape poses a significant threat to Coinbase.

Citi’s comments came as Coinbase shares had already been declining for several weeks. Over the past month, Coinbase shares fell more than 20%, decreasing from a peak of nearly $72 in April to $50 on Monday, May 1.

As previously reported, Coinbase intended to establish a global crypto exchange as of mid-March 2022. The initial reports regarding Coinbase’s forthcoming international crypto platform surfaced just days before the exchange officially announced that it had received a Wells notice from the United States Securities and Exchange Commission. In response, Coinbase filed a motion against the SEC on April 25, requesting the regulator to clarify industry regulations.

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