Kalshi, the parent company of crypto exchange Payward (which operates Kraken), and Coinbase have simultaneously submitted proposals to the U.S. Securities and Exchange Commission (SEC) and the Commodity Futures Trading Commission (CFTC) to launch perpetual futures contracts for individual U.S. stocks. These filings signal a significant move by crypto-focused entities to introduce a derivative product popular in the digital asset space into traditional equity markets.
Perpetual futures contracts are characterized by their lack of a predetermined expiration date. Their pricing is typically kept in alignment with the underlying asset’s price through a mechanism of periodic funding rate payments exchanged between holders of long and short positions. Kalshi’s proposed contracts will be cleared by Kalshi Klear, a CFTC-registered clearinghouse, and will be classified as ‘security futures products’.
Payward, operating through the Bitnomial Exchange, has submitted a rule change proposal to the SEC. The company plans to initially offer perpetual contracts for 10 U.S. stocks, including major companies like Tesla, Nvidia, Apple, Microsoft, and Amazon. Payward aims to facilitate 24-hour trading, five days a week, for these products on the Kraken platform for U.S. traders.
Coinbase has also submitted proposals for individual stock perpetual futures contracts on the same day. Related reporting mentions Coinbase’s previous proposal for 50 U.S. stocks. The simultaneous nature of these applications from multiple entities suggests a perceived market opportunity and a potential trend of crypto exchanges expanding their derivative offerings into traditional financial markets.
This development follows Kalshi’s May approval from the CFTC to launch perpetual futures contracts for cryptocurrencies such as Bitcoin (BTC), Ethereum (ETH), Solana (SOL), and XRP. The current push into U.S. stock perpetuals by these firms may also be influenced by the regulatory landscape, particularly following the failure of the CLARITY Act, which some interpret as creating a vacuum that these entities are seeking to fill.
Several uncertainties remain regarding these proposals. It is not yet reported whether the SEC and CFTC will approve the rule change applications, nor is the exact timeline for the potential launch of these contracts clear. The specific regulatory framework that may govern these ‘security futures products’ is also a point of consideration.
The introduction of these products could lead to increased availability of derivative products within the U.S. stock market and represents a continued expansion of crypto exchanges into traditional financial markets. The regulatory bodies are actively considering these new derivative products for U.S. equities.
Why This Matters
The materials describe a narrow update: Three entities, Kalshi, Coinbase, and Payward (Kraken’s parent company), have submitted proposals to the SEC and CFTC to introduce perpetual futures contracts for individual US stocks. Whether the SEC and CFTC will approve the rule change proposals.
Broader Context
Source materials place the factual news in this context: Kalshi, Kraken’s parent company, and Coinbase are simultaneously applying to the SEC/CFTC to launch ‘no expiration date, 24-hour trading’ US stock perpetual contracts.
