Coinbase Submits Recommendations to CFTC on Crypto Market Rules

The policy recommendations are detailed requests that Coinbase filed with the Commodity Futures Trading Commission (CFTC) as part of its review of the crypto market rules. The company reacted due to the demand made by the agency to provide feedback on the President’s Working Group Report on Digital Assets.

Coinbase Wants Clearer Rules Are Needed for DeFi and Stablecoins 

Coinbase Chief Policy Officer Faryar Shirzad posted portions of the submission on X. He indicated that the suggestions are based on proven steps that can facilitate innovation as well as decrease unwarranted risk. The proposals include the regulation of derivatives, stablecoins, and all-in-one crypto platforms in the United States.

The exchange also requested the regulator to approve structures that will enable customers to profit from all-in-one crypto platforms. Yet, it stated that there should still be strong conflict-of-interest protection.

Coinbase said such platforms can improve efficiency and reduce costs for market participants. The company stressed that protective rules can balance innovation with safety.

This follows the CFTC’s recent decision allowing Polymarket to operate as a U.S. exchange. It shows that the agency is increasingly engaging with new types of crypto trading platforms.

In addition, Coinbase suggested that the CFTC develops a practical regulatory framework for the decentralized finance (DeFi) derivatives market. The company stated that the DeFi market is expanding rapidly and require proper regulations to match the current oversight.

Coinbase Believes Stablecoin Collateral Can Boost U.S. Derivatives Market 

The company also suggested that stablecoins should be accepted as a collateral in the futures markets. Coinbase added that the reduction of risks and the possibility to trade any time could be achieved with the help of stablecoins. A recent move by the CFTC to introduce its own stablecoin collateral initiative to the U.S. derivatives market demonstrates the increasing regulatory attention to this area.

The letter argued that stablecoin collateral would make market liquidity stronger as it enables settlement at any time of the day. The company further said that this strategy will position the United States as a leader in the competitive derivatives space.

Coinbase emphasized that its licensed subsidiaries already have a range of market functions, such as futures commission merchant and designated contract market. The company claimed that its experience in these areas provides it with knowledge on how digital assets markets operate. It further stated that modern standards had to be in accordance with long-standing CFTC criterion.

Coinbase Says CFTC Strategy Facilitates Responsible Crypto Market Development

In the letter, the firm pointed out that the CFTC’s principles-based structure would be effective in regulating the crypto market. Coinbase praised the agency for preparing to test new rules as the crypto market is changing. This coincides with recent comments of the agency’s Acting Commissioner Caroline Pham who says that the CFTC and SEC will collaborate in clarifying crypto rules.

Also, Coinbase indicated that responsible expansion in the derivatives sector requires open interaction. The Coinbase response is the latest step in the growing debate regarding regulating the crypto market. How digital assets function within the wider financial system will be determined by these discussions.