Transactional taxes on financial products have been a hot topic recently.
In the equities market, these taxes are designed and proposed to reduce high frequency, thin layers of “liquidity”.
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The same goes for FX, but the sheer volume in FX will cause a transaction tax to have an astronomical impact on traders. As we all know , the volume in FX dwarfs equities volume and business offering FX are much more fluid in terms of what jurisdiction they set up shop.
If a Tobin-like tax gets implemented, look for traders to move their accounts away from jurisdictions implementing this tax. In many cases, this will force retail clients into holding accounts in a higher risk jurisdiction. A Tobin-like tax is terrible for the industry as a whole.