Coinbase wins approval for crypto clearinghouse: What to know

00:00 Speaker A

I'm not trying to just talk about Coinbase today, but we have to because they're not stopping at payments. They're now controlling almost every stage of a regulated derivatives trade. Also from the Coinbase blog, Coinbase received CFTC approval for Coinbase clearing LLC. Sounds like a landscaping company.

00:20 Speaker A

The CFTC has approved them, right? So now Coinbase controls three core pieces of derivatives trading, right? They have the exchange where derivatives are obviously listed and traded. They're the broker which connects customers to those markets, and now they can also be the clearing house, which stands between buyers and sellers, manages the collateral, and settles the contract. So this matters. So first of all, this is only on fully collateralized derivatives, right?

00:42 Speaker A

So this will be using USDC as the collateral. So again, stable coins being used as the plumbing in this situation, which will give them 24/7 settlement as the clearing house. This is not like the DTTC where you have T plus 2 or T plus 1 now, very exciting settlement for stock transactions because it has stable coins in the background, it can happen 247 365 nearly in real time.