Coinbase Canada seeks to build ‘everything exchange’ as new CEO plans first crypto futures offering

Coinbase Canada Inc. is vying to be the first platform in the country to offer crypto derivatives trading, including futures contracts, as it looks to become an “everything exchange,” its new chief executive said, while competition among fintech apps intensifies.

Eric Richmond, who became Coinbase Canada’s country director and CEO in June, said the company’s goal is to offer Canadians a single platform to manage all sorts of financial assets, not just crypto.

The company is seeking to obtain registration as a fully licensed securities dealer with the Canadian Investment Regulatory Organization while expanding its services well beyond operating as a cryptocurrency exchange, Mr. Richmond told The Globe and Mail this week.

It’s currently among the biggest such platforms regulated in Canada, and part of Coinbase Global, Inc., which holds more than US$290-billion in assets.

“My focus is really to grow the ‘everything exchange’ in Canada,” Mr. Richmond said. “Having your financial experience all within one app that’s underpinned by this new technology that makes things seamless, 24/7, frictionless.”

The company said it could not provide further details on other products it would introduce in Canada beyond derivatives trading such as crypto futures and commodity futures. In the U.S., Coinbase’s push for an “everything exchange” has included expanding the types of assets and trading available on the Coinbase app beyond crypto to traditional stocks and exchange-traded funds as well as prediction markets through a partnership with Kalshi.

CIRO spokesperson Joanna Nicholson said the regulator is unable to comment on the specific registration or authorization status of individual dealer members.

Mr. Richmond said Coinbase Canada hopes to open the door to crypto derivatives for eligible Canadians within the coming months.

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This type of trading, which involves speculating on the movement in price of a crypto asset such as bitcoin, faces regulatory hurdles, with major exchanges in Canada not offering them.

Canadian Coinbase customers eligible under Canadian securities law would have access to contracts listed on the Coinbase Derivatives Exchange, a U.S.-regulated exchange that is part of Coinbase Financial Markets. The exchange-traded futures listed on the CDE that would be available include both commodity futures and crypto futures.

The rollout comes as competition intensifies among fintechs to draw Canadian users, particularly younger investors who turn to mobile apps to trade stocks, ETFs and cryptocurrency.

U.S. brokerage Robinhood Markets, Inc., for example, announced last month it was bringing its popular trading app to this country after completing its acquisition of cryptocurrency company WonderFi Technologies Inc.

It also follows millions in losses for Coinbase this year and last amid low crypto trading volumes and other market headwinds.

While Coinbase in Canada is known primarily as a crypto exchange, “we are looking at something much broader than that,” said Mr. Richmond.

“The things we’re really turning our attention to – but it’s still early days and we’re still talking to regulators around this – is things like equities or derivatives,” he said. “Products that Canadians can be excited about.”

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Speaking to the broader state of the industry in Canada, Mr. Richmond, who previously was general counsel and head of business development at Shakepay and co-founded Canada’s first regulated digital asset holder Tetra Trust, said that among his priorities will be working closely with regulators to clarify and codify rules that he says can make it hard for many to participate in the digital economy.

“It’s hard to know what the rule book really is,” he said of Canada’s digital currencies landscape. “We’ve lost a lot of the entrepreneurs and investment here to operate here so I do think Canada has a little bit of catching up to do in that regard.”

Mr. Richmond’s predecessor, Lucas Matheson, who left the company last year to join Opendoor, was outspoken that Canada needed clear rules on stablecoins that classify them as payment tools instead of securities.

While the federal government earlier this year released a new national framework for stablecoins, a type of crypto cash pegged one-to-one to a fiat currency such as the loonie or the U.S. dollar, most crypto trading has operated within the narrow and patchwork confinement of Canada’s securities laws. This introduces administrative and transactional barriers that prevent digital assets from moving seamlessly like payments.

Without straightforward rules, businesses in the space face prohibitively expensive legal costs before launching new digital asset projects, a process that drives capital and talent abroad, Mr. Richmond said. He cited Ethereum and Cosmos as two examples of Canadian-founded and co-founded blockchain projects that ultimately moved elsewhere.

“They moved to Switzerland because the rules were a little clearer there,” he said

And while he praised the speed of the federal government’s progress in regulating digital assets such as stablecoins, he also said there’s room for improvement when it comes to facets such as rewards, the likes of corporate loyalty dollars, interest or yield. The topic is contentious as critics have raised concerns that allowing interest payments to stablecoin holders, for example, could drain away deposits from Canadian banks, hampering their ability to fund business and lending.

Mr. Richmond said rewards can take many forms. “To me it just makes sense to pay that back to the end users,” he said, adding that he hopes regulations will explicitly permit stablecoin issuers to offer those types of benefits to Canadian customers.

With reports from Meera Raman