Coinbase’s Bold Move: On-Chain Prediction Markets for the ‘Everything Exchange’

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Inside Coinbase’s push to bring prediction markets on chain and on venue

Coinbase is expanding its platform to include legally compliant prediction markets, allowing users to trade on the outcomes of future events alongside cryptocurrencies and stocks. They’re using The Clearing Company to handle these new ‘on-chain event contracts’.

Summary

  • Coinbase is moving prediction markets from a Kalshi integration toward an on‑chain, in‑house stack after acquiring The Clearing Company, aiming to keep them inside a regulated perimeter.
  • In Europe, financial‑underlying prediction markets fall under MiFID while politics and sports are pushed into fragmented national gambling regimes, leaving most current on‑chain volume in regulatory limbo.
  • Coinbase is already experimenting with cross‑margining via perpetual futures and sees long‑term scope to extend collateral efficiency across prediction markets, crypto, and tokenized assets on a single venue.

According to Coinbase’s international listings head, Côme Prost‑Boucle, the company aims to expand beyond simply being a cryptocurrency exchange. They plan to increasingly utilize regulated prediction markets as a key part of this broader strategy, as he discussed with crypto.news at ETHGlobal Cannes on March 31.

Prediction markets are central to Coinbase’s ambition to be a comprehensive, all-in-one exchange, according to Prost-Boucle. He explained to crypto.news that their overall strategy is straightforward.

Coinbase aims to become a comprehensive financial platform, offering a wide range of assets – everything you can think of – under a single, regulated system for both individual and professional investors.

Coinbase leading the way to become an ‘Everything Exchange’

Coinbase is expanding beyond basic cryptocurrency trading to include more complex financial products like derivatives, options, tokenized stocks, and even contracts based on future events. This allows users to trade based on predicted outcomes. According to a company representative, they’re bringing all these different services together under the Coinbase brand and have seen a very positive response, with plans to reach as many users worldwide as possible.

Coinbase entered the world of prediction markets cautiously. Their first offering in the U.S. partnered with Kalshi, a regulated exchange, which provided immediate legal security but also limited where and how the product could operate.

According to Prost‑Boucle, the initial version of the product is currently available in the US and limited other regions. It’s not yet available in Europe due to unclear regulations. This version connects Kalshi’s markets to the Coinbase platform, allowing users to trade small contracts on events like elections, sports, and economic data, all within the existing U.S. legal framework for these types of contracts.

Coinbase is now moving more boldly. In December, they purchased The Clearing Company, a startup that helps facilitate prediction markets and was already involved in event-based contracts.

In a recent interview, Prost-Boucle described “The Clearing House” as a company Coinbase is working with, but the bigger picture is straightforward. Coinbase wants to build these capabilities in-house, allowing them to create products directly on the blockchain with their own unique approach to handling all types of assets. Essentially, Coinbase is shifting from relying on external, regulated systems to owning and controlling the entire clearing and risk management process, and then expanding its operations on the blockchain while remaining compliant. This differs from companies like Polymarket, which initially focused on unrestricted on-chain trading and addressed regulations later.

Prediction markets dominate conversation at ETHGlobal

As we explore integrating prediction markets into Coinbase alongside crypto, derivatives, and tokenized stocks, a key factor for success will be how efficiently we use collateral. I’m hearing strong demand from institutional clients for cross-margining – essentially, letting them use the same collateral across different products. We’ve already implemented this for our perpetual futures, and the response has been very positive. They’re looking for continuous exposure and hedging opportunities, which perpetual futures naturally offer. Our goal is to move beyond separate collateral pools for each product – BTC futures, tokenized stocks, and prediction markets – and create a single, unified system. This would unlock capital that’s currently locked up in isolated silos. We’re actively developing this cross-margining functionality now, and I believe it represents a crucial step toward a more integrated and efficient trading experience for our users.

Europe presents the biggest challenge to developing prediction markets. According to Prost‑Boucle, the lack of consistent rules makes it complicated. How a prediction market is regulated depends on *what* it’s predicting. Contracts based on financial assets, like the future price of Bitcoin, are considered financial derivatives and fall under MiFID regulations. However, predictions about events like elections or sports games are classified as gambling and are subject to different laws. Essentially, financial predictions are regulated as investments, while everything else falls under gambling regulations, and most current market activity focuses on these non-financial predictions.

The recent division creates uncertainty for most current online betting activity – which largely focuses on politics and sports – when it comes to regulated exchanges. Any company wanting to offer bets on these topics across Europe will face a complicated situation, needing to comply with different gambling laws in each country. Each nation has its own licensing requirements, consumer protections, and sometimes even government-run betting services. As Prost-Boucle explained, companies would need to meet every individual European gambling law because there isn’t a single, unified set of rules. These laws are very specific to each country and can be difficult to obtain. Despite these challenges, he remains optimistic that Europe will eventually establish clear regulations for prediction markets, creating a more supportive environment for them to grow.

As a crypto investor, I’m really watching Coinbase’s move into prediction markets. It’s not just about making money from trades; they seem to think these markets can actually become a better source of information than polls, research reports, or even the news. I’ve already noticed mainstream media like CNBC, CNN, and the Dow Jones starting to use odds from platforms like Polymarket in their reporting, which shows how seriously they’re taking this too. It feels like we’re seeing a real shift in how information is gathered and shared.

This highlights the importance of accurate information. When financial markets begin to react to global events like conflicts or political shifts, disagreements about what *really* happened can lead to disputes over payments. This means that the sources used to verify events and settle contracts – known as oracles – will likely face more attention, both from people placing bets and from government regulators.

According to Prost-Boucle, problems often start with poorly written contracts. He emphasizes the importance of clearly defining the conditions that trigger certain outcomes when creating a contract. He suggests using multiple, consistent sources of information to avoid confusion during events. While he sees potential in using AI to gather information from various sources and provide a unified assessment, he remains cautiously optimistic. He believes AI could help create a consistent, unbiased view by combining data from different sources, avoiding reliance on any single media outlet or group.

Currently, Coinbase isn’t focused on the most complex forms of prediction markets. Instead, they’re prioritizing demonstrating that these markets can operate within the existing regulatory framework of their platform. This involves keeping them regulated, handling clearing and risk internally through The Clearing Company, and integrating them into a larger platform where collateral can be used across various products. As Brian Armstrong has stated, Coinbase aims to be the most reliable entry point into the crypto world. From this perspective, complex regulations or new technologies like AI oracles are simply challenges to overcome, not reasons to avoid participating in the market.

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2026-04-01 16:41