COINBASE DERIVATIVES QUIETLY BECAME A SECURITIES EXCHANGE — NOW IT WANTS PERPETUAL STOCK FUTURES, ON BITCOIN’S PRECEDENT

Coinbase Derivatives filed with the SEC on September 18 to set customer margin requirements for security futures products. The notice went on public inspection September 23. Dull on its face. The sentence that matters is the one about what the margin is for: the exchange intends to list cash-settled futures on individual equity securities and exchange-traded fund shares, including perpetual single-stock futures, under listing standards it will adopt in a separate filing.

Perpetual. No expiry date. A contract that never settles, written on a single stock, at a registered American exchange. Coinbase Derivatives registered as a national securities exchange by notice on September 1 and the SEC acknowledged it on September 8. That got almost no attention. The margin rules came first and the listing standards are still to come.

The door it is walking through was opened by bitcoin. Kalshi filed its own perpetual stock futures standards on the same day, September 18, and its argument to the SEC leans on the CFTC having already approved Kalshi's perpetual bitcoin contract in May. Kalshi's own words: the defining characteristics of commodity futures and security futures products apart from their respective underliers are the same. Bitcoin proved the shape of the contract was lawful. Equities are now spending the proof.

The precedent is not settled. CME sued the CFTC in June over that bitcoin approval, arguing the perpetual contracts are swaps and not futures, and no court has ruled on the merits yet. Two exchanges are building on a foundation that is still in front of a judge. At the time of this writing, bitcoin was $85,553.