TLDR
- Coinbase asked the CFTC to allow stablecoins as collateral for derivatives trading.
- The exchange called for clear rules for DeFi derivatives markets in the US.
- Coinbase supports integrated crypto platforms with protections for users.
- The CFTC has already allowed Polymarket to operate under US oversight
Coinbase has submitted key recommendations to the CFTC aimed at reshaping the regulatory framework for digital assets in the United States. The proposal urges support for integrated crypto platforms, the use of stablecoins as collateral, and clear rules for DeFi derivatives. As digital asset markets continue to grow, Coinbase believes updated policies can reduce risk, increase market efficiency, and ensure U.S. leadership in the global crypto economy.
Coinbase Seeks Modern Regulatory Approach for Digital Assets
On November 28, 2025, Coinbase submitted a letter to the Commodity Futures Trading Commission (CFTC) responding to a request for information on the President’s Working Group (PWG) Report on Digital Asset Markets. The letter addressed key recommendations focused on improving oversight of digital asset markets while supporting innovation.
Coinbase emphasized the importance of updating market rules to align with evolving digital asset activity. The letter highlighted Coinbase’s existing regulatory structure, including its roles as a designated contract market and a futures commission merchant. The company said it is well-positioned to advise on digital asset market operations based on its experience.
Faryar Shirzad, Chief Policy Officer at Coinbase, shared parts of the letter publicly. He noted that the recommendations are based on proven models and aim to lower market risk while encouraging responsible innovation in the U.S. crypto markets.
Support for Vertical Integration with Safeguards
The letter called for the CFTC to allow vertically integrated platforms to operate under strong conflict-of-interest protections. Coinbase argued that allowing crypto platforms to offer trading, clearing, and custody services within the same group can lower costs and improve efficiency for users.
However, Coinbase made clear that such models must include tested guardrails to protect market integrity. The firm noted that with appropriate oversight, vertically integrated models can benefit both retail and institutional traders in the U.S.
The company believes this structure will help keep U.S. markets competitive globally, particularly as digital asset adoption increases.
Request for Rules on DeFi Derivatives
Coinbase also recommended that the CFTC establish a regulatory path for decentralized finance (DeFi) derivatives. The letter pointed to the growing volume and usage of DeFi protocols and the need for a clear framework that enables their lawful operation.
The exchange stated that DeFi presents unique challenges but also major opportunities. It encouraged the CFTC to consider a balanced approach that supports new financial technologies without increasing risk.
The call for action follows the CFTC’s recent approval of Polymarket, a prediction market platform, to operate under certain conditions in the U.S. This move suggests a shift toward recognizing new forms of digital financial markets.
Stablecoins as Collateral for Futures Trading
Another major recommendation from Coinbase was for the CFTC to allow stablecoins as collateral in derivatives markets. The company argued that this change would enable 24/7 trading, reduce credit risk, and strengthen liquidity.
Coinbase said that using stablecoins can improve settlement processes and create more resilient futures markets. The firm added that stablecoins are already widely used in crypto markets and could bring added flexibility to U.S. regulated markets.
The CFTC has shown interest in this area, recently launching its own initiative to explore the use of stablecoins as collateral. Coinbase’s letter builds on that momentum and supports a wider adoption of stablecoin usage within regulated financial systems.
Industry Push for Regulatory Clarity
Coinbase’s letter underlined the need for updated standards that align with the CFTC’s principles-based framework. The firm expressed willingness to work with regulators to develop measures that promote both safety and innovation.
The proposals come amid renewed institutional interest in Bitcoin and other digital assets. Rising trading volumes and market volatility have increased calls for modern and clear regulation in the space.
Coinbase concluded its submission by thanking the CFTC, particularly Acting Chair Caroline D. Pham, for continuing to engage with the digital asset industry.
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