US-based cryptocurrency exchange Coinbase, has announced a partnership with Derivatives Clearing Organization (DCO) Nodal Clear to integrate Circle’s USDC stablecoin as collateral for futures trading.
USDC Set To Become Regulated Collateral
According to the official announcement released on Wednesday, Coinbase Derivatives, LLC, which operates as a designated contract market regulated by the Commodity Futures Trading Commission (CFTC), will work alongside Nodal Clear under a multi-year renewal agreement, aimed to make USDC eligible as collateral for futures trading starting next year.
Boris Ilyevsky, CEO of Coinbase Derivatives, highlighted that this initiative represents a meaningful step in establishing USDC as a viable cash equivalent, enhancing efficiency in financial transactions through near-instant money movement and secure custody solutions.
Ilyevsky stated, “Our commitment to integrate USDC as collateral reflects our dedication to enhance trading capabilities for US market participants.”
This integration is expected to not only improve operational efficiency but also ensure secure custody through Coinbase Custody Trust, which is regulated by the New York Department of Financial Services (NYDFS).
Circle And Coinbase Stocks Rise
Paul Cusenza, Chairman and CEO of Nodal Clear, expressed enthusiasm about the partnership, stating, “We are excited to continue our relationship with Coinbase Derivatives and provide innovation to the industry.”
He noted that the plans to integrate USDC as collateral are part of their ongoing commitment to respond to market needs, aiming for a forward-thinking approach in the trading ecosystem.
As the financial landscape evolves, stablecoins like USDC are increasingly recognized for their potential to create a more flexible and modern financial system.
US regulators are making strides to support this innovation, with Congress moving towards passing legislation that would affirm the cash equivalence of USDC.
The CFTC has also been actively promoting the recognition of stablecoins, evidenced by recommendations from its Global Markets Advisory Committee to broaden the use of non-cash collateral through distributed ledger technology.
This momentum has positively impacted the market, with shares of both Circle and Coinbase experiencing significant gains following the Senate’s passage of the GENIUS Act.
Circle’s stock surged by 33% after the bill was passed, continuing a remarkable rally since its stock market debut. Meanwhile, Coinbase, which co-founded USDC and shares its revenue with Circle, saw its shares rise by over 16%.
As stablecoins become a more prominent source of revenue for Coinbase, with stablecoin-related income jumping 50% year-over-year in the first quarter, the integration of USDC into futures trading is poised to play a crucial role in revolutionizing the global financial system.
Featured image from Shutterstock, chart from TradingView.com
