Coinbase International Exchange Implements 10x Leverage Cap on Perpetual Futures Trading

Coinbase International aims to maintain a robust and reliable trading environment for its global user base by striking a balance between customer access and systemic risk management.

Coinbase International Exchange, the overseas arm of the prominent United States-based Coinbase crypto exchange, has announced a new leverage cap for its perpetual futures products. Traders will now be limited to 10x leverage when engaging in trading activities on the platform.

Limitations on Perpetual Futures Contracts

As disclosed in a recent announcement on December 28, the leverage cap applies to Coinbase International Exchange's popular perpetual futures contracts, including but not limited to Bitcoin and other digital assets. Cointelegraph reported that traders utilizing 10x leverage are further bound by restrictions on maintaining a notional value of $90,000 across all perpetual contracts.'

To comply with the leverage cap, traders exceeding the 10x limit will be subject to default initial margin (DIM) requirements for their accounts, per Cryptoslate. Depending on the digital assets involved, DIM ranges from 20% for 5x leverage to 40% for 2.5x leverage in the case of Coinbase International perpetual.

Coinbase International Exchange emphasizes that these limits are subject to frequent review, considering important factors such as order book depth, trading volumes, and stress testing results against insurance fund balances. The exchange aims to balance offering customers access to 10x leverage while mitigating systemic risks associated with higher-leverage trading.

Coinbase International's Perpetual Futures Trading Launch

Coinbase International introduced perpetual futures trading on September 28, catering exclusively to non-U.S. consumers in select countries who meet eligibility criteria. The exchange obtained a class F license from the Bermuda Monetary Authority (BMA) to facilitate this service. Traders interested in accessing Coinbase International's futures trading must complete eligibility assessments before opening a Coinbase Advanced trading account.

Coinbase International's launch in Bermuda coincided with increased regulatory scrutiny faced by its U.S. parent from the Securities and Exchange Commission. The exchange appreciated Bermuda's regulatory environment, highlighting its commitment to transparency, compliance, and cooperation.

Photo: Coinbase Press

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