Coinbase Expands CFTC-Regulated Futures with Silver and Stellar (XLM) Contracts

• Coinbase recently announced the launch of futures contracts for Silver (SLR) and Stellar Lumens (XLM) through its Coinbase Derivatives Exchange.
• Coinbase’s futures contracts for these assets align with its mission to provide secure, accessible, and regulated financial products.

Coinbase Derivatives’ primary goal in launching new crypto futures contracts is to create markets that offer retail traders diversification, price discovery, risk management, and margin. It has made a significant step towards its goals with the launch of new futures contracts for Silver (SLR) and Stellar (XLM).

These add to the list of  already CFTC-regulated products, which include LTC, DOGE, SHIB, AVAX, DOT, LINK, Gold, BTC, ETH, BCH, and Oil. On its official X account, it announced that the contracts will be launching on November 11 2024.

The Coinbase Derivatives is a contract market registered with the Commodity Futures Trading Commission (CFTC) that allows users to trade and hedge the price of digital assets. The derivatives are contracts that derive their value from an underlying asset or commodity, thus allowing you to gain exposure to an underlying asset without purchasing it.

The Impact of Coinbase’s Silver and XLM Futures

Coinbase’s official statement suggests that by combining traditional commodities like Silver with cryptocurrencies such as Stellar, they aim to create a more comprehensive trading platform. This approach is meant to diversify opportunities, allowing investors to manage risk across different asset types. The futures contracts they offer support effective price discovery meaning they help establish fair market prices while enabling traders to respond confidently to market shifts.

The Stellar and Silver contracts are designed to increase market accessibility and are structured for retail-focused trading with smaller contract sizes. Specifically, each Silver contract represents 50 troy ounces, while each Stellar Lumens contract is 5,000 tokens. By introducing these retail-sized contracts, Coinbase aims to encourage a more extensive range of participation among retail traders who may be looking for affordable ways to enter futures markets.

Silver being a new tradable asset for Coinbase, it reflects a push into commodity markets. Silver futures give users a means of hedging against inflation or other economic changes, as silver remains a traditionally stable asset during times of market volatility. On the other hand, XLM is a decentralized, open-source network that allows low-cost cross-border transactions between any pair of cryptocurrencies.

Stellar additionally has an inbuilt decentralized exchange (DEX) that allows users to trade assets on the network. Beyond its abilities for low-cost transactions, Stellar uses a unique system, the Stellar Consensus Protocol (SCP), to process transactions more quickly and reliably than many traditional networks.

In other developments, CNF reported that Robinhood announced its support for Stellar on its official X account on October 23. This allows EU users to deposit and withdraw XLM on the Robinhood app. This is an important move for Robinhood and XLM, as the flexibility in handling the coin can benefit both ecosystems. Despite a 1.94% dip in XLM’s price to $0.0914 over the last 24 hours, trading volume rose by 10.74% to $54.29 million, indicating ongoing interest from investors in XLM’s diverse use cases.