Financial Commission Launches Regulation for Cryptocurrency Liquidity Providers

After launching a regulation program for bitcoin brokers, the Financial Commission has announced the creation of new supervisory regulation for cryptocurrency Liquidity Liquidity The term liquidity refers to the process, speed, and ease of which a given asset or security can be converted into cash. Notably, liquidity surmises a retention in market price, with the most liquid assets representing cash.The most liquid asset of all is cash itself.· In economics, liquidity is defined by how efficiently and quickly an asset can be converted into usable cash without materially affecting its market price. · Nothing is more liquid than cash, while other assets represent The term liquidity refers to the process, speed, and ease of which a given asset or security can be converted into cash. Notably, liquidity surmises a retention in market price, with the most liquid assets representing cash.The most liquid asset of all is cash itself.· In economics, liquidity is defined by how efficiently and quickly an asset can be converted into usable cash without materially affecting its market price. · Nothing is more liquid than cash, while other assets represent Read this Term providers (LP). A Hong Kong entity, the Financial Commission provides regulatory oversight to the financial industry through arbitration hearing between brokers and liquidity providers and their customers.

The new regulation for cryptocurrency liquidity providers comes as several bitcoin ECNs have been launched over the last few months including Exgate and Ibinex. The ECNs aggregate bitcoin and other cryptocurrency pricing from numerous exchange operators. Although several firms had planned to launch bitcoin ECNs as early as 2013, they have proved harder to create than initially believed due to price differentials between Bitcoin exchanges, as well as delays involved with transferring funds and bitcoins between exchanges. However, as the industry has matured, and with the arrival of professional market makers to Cryptocurrencies Cryptocurrencies By using cryptography, virtual currencies, known as cryptocurrencies, are nearly counterfeit-proof digital currencies that are built on blockchain technology. Comprised of decentralized networks, blockchain technology is not overseen by a central authority.Therefore, cryptocurrencies function in a decentralized nature which theoretically makes them immune to government interference. The term, cryptocurrency derives from the origin of the encryption techniques that are employed to secure the netw By using cryptography, virtual currencies, known as cryptocurrencies, are nearly counterfeit-proof digital currencies that are built on blockchain technology. Comprised of decentralized networks, blockchain technology is not overseen by a central authority.Therefore, cryptocurrencies function in a decentralized nature which theoretically makes them immune to government interference. The term, cryptocurrency derives from the origin of the encryption techniques that are employed to secure the netw Read this Term, the pricing differences between Bitcoin exchanges has decreased.

Providing oversight, the Financial Commission’s cryptocurrency liquidity provider regulation will included the monitoring of financial requirements, reporting and record keeping. Per their rules for regulation, approved members will have to follow minimum net capital level requirements, such as maintaining a net capital amount of 10% of all liabilities owed to customers exceeding $500,000.

According to the Financial Commission, the new regulatory membership for cryptocurrencies follows similar successes they have had from acting as a self-regulated oversight committee to the forex, CFD and binary options industries.

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