This week was an interesting one for the forex and cryptocurrency industries. So let’s take a moment to see what the most exciting stories of the past week were, in our latest “best of the week” analysis.
eToro storms the US market
eToro has fulfilled its promise from last May and entered the US market. The social trading broker announced last week it aims to provide cryptocurrency trading services to clients in 31 states.
Beyond that, the Israeli-based firm will provide the traders with access to the company’s own digital asset wallet. This will allow them to send, receive and store cryptocurrencies on the eToro platform.
eToro’s US customers will be able to trade 13 cryptocurrencies, such as: Bitcoin, Ethereum, Litecoin, Bitcoin Cash, Ripple and Stellar. However, the firm did say on Thursday that it plans to add more coins in the near future.
GAIN capital to close its City Index brand
GAIN capital’s Q4 2018 earnings report revealed that the firm heads towards a serious restructure. After years of operating in two separate brands: FOREX.com and City Index, the trading giant plans to slowly phase out the City Index brand.
The soon-to-be-canceled brand, which was acquired for $118 million in 2014, focused mostly on retail FX. Now, this effort will be merged into the native GAIN brand and will be under one umbrella with the institutional branch.
The rollout of the GAIN Capital brand will start from Australia with sophisticated clients in mind.
MahiFX sells, FXDD buys
MahiFX has announced last week it is selling its business-to-client retail forex operations in the United Kingdom, Australia and New Zealand. The New-Zealand based group aims to focus mostly on B2B trading technology.
This latest move comes as the retail trading industry is becoming more sophisticated and more strictly regulated, therefore, demand for high-performing analytics, greater control and differentiation of pricing is growing.
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While it is not clear yet who is on the sale side of all Mahi’s branches, we now know that FXDD will receive the broker’s FCA regulation. According to the FCA register, The FX brand, controlled by Nukkleus Inc, has been trading under MahiFX’s licence since the 18th of February, 2019.
Facebook’s crypto to render fiat exchange and cross-border transfer obsolete
Facebook’s anticipated launch of its own crypto coin this year may be the biggest cryptocurrency adoption in history. Finance Magnates analyzed the meaning of offering an in-house cryptocurrency to the platform’s 1.5 billion users.
“In the US, we take our fiat currency for granted, after all, it is the de facto global reserve currency,” says Konstantin Brazhnik, Chief Technology Officer of the Juris Project. “However as soon as one steps a foot outside of the US borders, they feel the pain of global currencies that fluctuate with market and political forces. A Facebook or Telegram has the potential to smooth these volatilities in a way that consumers will flock to them just to avoid the uncomfortable and obsolete practice of fiat currency exchange.”
FX brokers move offshore, but facing rocky waters
As ESMA regulatory restriction continue to take their toll on brokers, more and more of them are seeking warmer regulators on the warm coast of offshore locations.
Finance Magnates has analyzed seven of world’s most popular locations for FX and CFDs brokers, and presented the main differences between them.
We examined why certain brokers will head to cross the Atlantic to seek the Belize license, while others will try to obtain one in the tiny Pacific island nation of Vanuatu.
Speaking of which, Vanuatu is considered one of the most popular destinations for offshore regulation. Over the past couple of years, its regulatory framework has become somewhat of a safe haven for the forex and CFDs brokerage industry at a time of some critical changes to the sector.
However, this phenomenon might be facing an obstacle, when the VFSC, when the local regulator, is rolling out a new regulatory framework.
The changes were confirmed by a broker regulated by the VFSC and an owner of a legal firm with several locally regulated clients. The new requirements include a local director and an insurance.
To learn more details and to read all the commentaries about the new requirements, click here.