Another week has passed on the cryptocurrency and forex markets. Now it’s time to look back at the stories that made the week.
Hope in the East
Retail brokers in Europe may be worrying about leverage caps crimping their revenue.
But traders in Japan, a country that has had leverage caps for several years, continue to serve as a hopeful example for the rest of the retail trading industry.
And on Friday, Swiss inter-dealer broker Compagnie Financiere Tradition, the owner of Japanese retail broker Gaitame.com, released results showing that traders in the Land of the Rising Sun continue to put down more cash to meet margin requirements.
Time to tokenize
Along with ‘decentralization,’ ‘blockchain’ and ‘machine learning,’ ‘tokenization’ may be one of the most overused and annoying terms in the financial technology space at the moment.
That’s sad because the technology genuinely holds a lot of promise – particularly for traditionally illiquid assets like real estate.
To find out more about how one goes about tokenizing assets, we spoke this week to Lex Sokolin, global head of fintech at ConsenSys – a blockchain technology company.
Trading FX with Saudis
Over the past couple of years, Saudi Arabia has made some crazy changes to its laws. For instance, women are now actually allowed to drive, and cinemas aren’t banned anymore.
And in April of this year, the Middle Eastern country also issued its first license for foreign exchange trading.
On the heels of that announcement came the news this week that Equiti Group – a retail trading firm – would be partnering with Riyad Bank.
The trading firm, which has its headquarters in the UAE, will be providing liquidity and a trading platform to the bank, which is the third-largest in Saudi Arabia.
After raising $24 million last year, cryptocurrency exchange BlockEx has seen a precipitous decline in its fortunes.
Large scale layoffs were reported in January. That was followed by reports that the company was on the cusp of going bankrupt.
The firm did eventually file for insolvency last week and, along with the resignation of CEO Adam Leonard, the company was bought by a British asset manager.
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Single-Stock CFDs are now the norm
Once thought of as a nice addition to currencies and commodities, single-stock CFDs are becoming the norm for retail brokers.
A need to diversify products in the wake of regulatory changes and growing customer demand is pushing firms to adopt the products.
But it’s not easy to do. Expensive and lengthy compliance processes and technological problems mean it’s unlikely every broker will be offering CFDs on shares.
Crypto payments not driving adoption
The idea that you should be able to pay for your coffee or groceries with bitcoin has been popular for several years, with a number of companies now vying to provide the service.
Unfortunately, it doesn’t appear as though these firms are really helping to bring more people into the crypto markets – or that they even provide a particularly good service themselves.
Of course, in countries like Venezuela, payments with digital assets have been popular for years. The problem there is that, even if you have bitcoin to spend, you may not have any coffee to drink or groceries to buy.
Ali Baba getting tight with the central bank
The Chinese government loves to spy on people and track everything they do. So it’s not that surprising that they want a cryptocurrency that would probably enable them to see every transaction you’ve ever made.
Said cryptocurrency would be going live in November of this year, to tie in with a big day of shopping in China.
Some of the biggest firms in the country also look set to demo the new digital asset before it goes live. Ali Baba, which operates an online marketplace, and technology giant Tencent will get to use the central bank cryptocurrency, along with a number of banks.
AFX goes into administration
Fake prime of prime broker AFX went into administration this week, shortly after the FCA and CySEC suspended licenses belonging to the company.
Insolvency practitioners from CG Recovery were appointed as special administrators of AFX Markets, with the FCA confirming the application was made to protect the interests of the customers.
Switzerland has become something of a hotspot in the cryptosphere, with the small country even establishing a ‘crypto valley’ in Zug.
This week two more firms were given permission to set up shop in the country.
SEBA Crypto AG and Sygnum AG, which have received banking licenses, will only be allowed to provide services to institutional clients.