The New Zealand regulated entity under the FXOpen brand announced today several new account denominations, taking a new spin on base deposits reflected in a margin account balance, by adding Bitcoin, Litecoin and gold to its account balance base currency for clients to choose.
Effectively, clients can now open accounts denominated in any of these currency types, with Bitcoin and Litecoin available for FXOpen’s crypto account offering, and gold available for ECN and STP accounts that the broker offers.
The company said there is no difference between these accounts and accounts traditionally based in USD, or any other currency, except that the base currency is used as the base asset to calculate balance, any floating profit and/or loss, and other account parameters affected by margin balance and account equity in the MetaTrader4 (MT4) platform that FXOpen uses.
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The company has developed a fractional value for Bitcoin, comparable to how pips are fractions of a unit of currency, further dividing a cent or penny, into thousandths and tens of thousandths. FXOpen explained that for client’s convenience it used smaller decimal places for this purposes, such as Bitcoin accounts reflective in Millibitcoin (MBT) or 1 thousandth of a bitcoin (or 0.001 BTC), and for gold dividing to arrive at 1 GLD or 1 thousandth of a troy ounce (0.001 troy ounce equal to approx. 0.03 grams).
However, the structure for LTC for Litecoins didn’t need to be divided due to its inherently low value – relative to BTC or gold, historically speaking (and based on current prices).
Obviously such a method will allow greater precision for smaller deposits, as well as for fine calculations to be made even on larger amounts, as the denominations will purposefully be broken into thousandths, reflective in MBT and GLD in the two examples above.
Hence, a user deposits 1 BTC would get a balance with 1000 MBT, regardless of the underlying price of BTC relative to other assets. However, when trading and using MBT as margin, naturally the value of the margin would need to be calculated against whatever other asset or instrument was being traded.
FXOpen said that it is the first Forex broker to offer clients MT4 accounts denominated in Bitcoin and Litecoin, and that coupled with direct BTC and LTC deposits, these accounts make a unique industry offering by allowing clients to deposit, trade and withdraw profit with no conversion costs and minimal commission (only 0.001 BTC for withdrawals), according to the announcement. Forex Magnates recently covered the interest FXOpen showed in digital currencies at the end of last month.