Dog-themed crypto asset Dogecoin (DOGE) is surging after Coinbase announced its plans to launch futures trading for the memecoin.
According to a filing by Coinbase earlier this month, the top US-based crypto exchange platform registered with the Commodity Futures Trading Commission (CTFC) to offer DOGE derivatives starting on or after April 1st.
“Pursuant to Commodity Futures Trading Commission hereby submits for self-certification its initial listing of the Dogecoin futures contract to be offered for trading on the exchange on or after April 1st.”
News of Coinbase’s plan to offer DOGE futures sent the meme asset flying, as it went from a March 20th low of $0.129 to a peak of $0.155, a 20% increase. DOGE has since retraced and is trading for $0.152 at time of writing, an increase of about 15% during the last 24 hours.
According to Bloomberg analyst James Seyffart, the U.S. Securities and Exchange Commission (SEC) – which has jurisdiction over securities and not commodities – may object to Coinbase’s plan even though it would be hard to make the case that DOGE futures would count as securities.
“This is interesting… wonder if the SEC objects to these being classified ‘commodities futures’ vs ‘securities futures’. These all forked from Bitcoin so ‘these are securities’ claims would be hard to make after spot Bitcoin ETF approvals. Might be why Coinbase chose them.”
In the filing, Coinbase says that Dogecoin’s inflationary mechanism makes it ideal to act as the currency of the internet because it promotes spending rather than holding.
“Unlike Bitcoin or Litecoin, Dogecoin does not have a cap on the total supply of coins. Over 140 billion Dogecoins are in circulation, with new blocks added to the Dogecoin blockchain every minute, and a reward of 10,000 DOGE per block.
This design leads to an inflationary supply model, which contrasts with the deflationary model of Bitcoin and many other cryptocurrencies. The inflationary nature of Dogecoin is intended to encourage spending and use in tipping on social media and online forums, rather than holding as a digital investment.”
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