Dogecoin, once regarded as a joke, is now receiving serious attention this April Fool’s Day. Coinbase Derivatives is set to introduce futures trading for the top memecoin, along with litecoin and bitcoin cash.
On March 7, Coinbase announced its intention to launch monthly cash-settled futures contracts for dogecoin, litecoin, and bitcoin cash through three separate letters to the Commodities Futures Trading Commission (CFTC). These letters, addressed to CFTC Secretary Christopher Kirkpatrick, outlined the sizes, settlement methods, and structure of the proposed contracts, leveraging a benchmark rate by Market Vector.
Coinbase emphasized that it would utilize the self-certification route under CFTC Regulation 40.2(a) to list these futures contracts. This approach allows exchanges to introduce new offerings without waiting for direct CFTC approval, provided they confirm the product’s compliance with the Commodity Exchange Act and CFTC regulations.
The classification of these cryptocurrencies as commodities, stemming from bitcoin, recognized as such by the Securities and Exchange Commission, raises intriguing regulatory questions. James Seyffart, an ETF research analyst at Bloomberg Intelligence, commented on X.com, stating, “This is interesting… wonder if the SEC objects to these being classified as ‘commodities futures’ versus ‘securities futures’. Given their origins from Bitcoin, arguing these as securities would be challenging, especially after spot #Bitcoin ETF approvals. Coinbase’s selection might be strategic.”
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