Coinbase's Four Moves: Entering Futures, Issuing $2 Billion in Bonds; CEO Asks: What to Do When Stablecoins Become Inflationary Coins?

Coinbase, despite being embroiled in a lawsuit with the SEC, has been actively pursuing various initiatives, including registering as a futures commission merchant, establishing a new crypto division called "Unit 410," issuing $2 billion in bonds, and the CEO actively seeking opinions on stablecoin design mechanisms on Twitter.

Plan to Enter the Derivatives Market

On 9/16, Coinbase announced that it has submitted a registration application to the National Futures Association (NFA) to become a futures commission merchant in the United States. The move is said to be part of its plan to expand its product offerings to include futures and derivatives trading services. While the approval timeline is uncertain, Coinbase has been listed as a "NFA Pending Member" on the NFA website.

Establishment of New Cryptocurrency Division "Unit 410" and Issuance of $2 Billion Bonds

Coinbase has not disclosed much about the future direction of "Unit 410." The division will independently develop new crypto projects outside of Coinbase's main business, with former Polychain Labs head Rob Witoff leading the initiative.

Although Coinbase claims the establishment of "Unit 410" is recent on Twitter, the unit's LinkedIn page shows it was founded in 2018. Coinbase CEO explained that this team was originally funded by Coinbase, and he is excited to have them back.

In May, Coinbase announced the issuance of $1.25 billion in 2026 senior convertible notes but has not provided further updates.

According to SEC filings submitted by Coinbase this month revealed that it plans to privately issue $1.5 billion in secured senior notes due in 2028 and 2031.

However, a Bloomberg report citing anonymous sources indicated that due to an unexpectedly high demand of $7 billion, the private placement amount will be increased to $2 billion. Bonds with 7-year and 10-year maturities will be issued at interest rates of 3.375% and 3.625%, respectively. An anonymous source stated:

The interest from fixed-income investors indicates that cryptocurrency is no longer exclusive to venture capital. Pension funds, hedge funds, and other bond-focused investors are eager to participate.

Coinbase CEO Brian Armstrong has been active as well. Following his previous criticism of the SEC's scrutiny over its lending product "Lend," he took to Twitter to seek opinions on stablecoin design mechanisms.

How to Achieve a Truly Stable Stablecoin?

He asked on Twitter, if a fiat-backed stablecoin becomes an inflation coin due to currency inflation, how can a truly stable stablecoin be achieved? By tracking a basket of prices through an oracle to maintain purchasing power parity? He welcomed discussions from all parties.

Former Coinbase CTO Balaji Srinivasan stated:

There are two types of stablecoins, Fiatcoins pegged to fiat currencies like the US dollar, but if the fiat currency starts inflating, it is not truly stable; "Flatcoins" is a newer concept that optimizes price stability by tracking a basket of goods on-chain.

Twitter founder Jack, who solely supports Bitcoin, commented:

Bitcoin can solve this problem.

Armstrong, however, questioned whether Bitcoin can be a stablecoin, noting that while it is important and helpful for futures contracts and trading, unlike a uniform pricing mechanism, with Bitcoin's limited supply and a growing population/economy, it seems unlikely to function as a stablecoin.

Some recommended Ethereum founder Vitalik Buterin's optimism for RAI, a new algorithmic stablecoin based on simple mechanisms and minimal governance philosophy. Armstrong simply responded with "can't understand how it works." These are the only three solutions Armstrong responded to, while analysts like Willy Woo, Michael Saylor advocating for Bitcoin, and BSV supporter Calvin Ayre praising BSV did not get Armstrong's approval.