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Cryptocurrency Derivatives Could Soon Be Banned by Regulators: The Economist

  • Alex Dovbnya
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    The Economist argues that the FCA and other regulators will start banning crypto derivatives to protect retail investors  

Cryptocurrency Derivatives Could Soon Be Banned by Regulators: The Economist
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Contents

According to a recent article published by The Economist, regulators around the globe could soon start stepping up their effort when it comes to outlawing cryptocurrency derivatives. In such a way, they want to protect retail investors from the mercurial market. 

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FCA’s crackdown

The Financial Conduct Authority (FCA) proposed a ban on cryptocurrency futures, options and other products that allow investors to bet on the prices of the volatile asset class back in July. However, it needed more time to consult with financial regulators. 

The British watchdog is expected to voice its verdict at the beginning of 2020, but the Economist states that the FCA is unlikely to back down from its plan to crack down on crypto derivatives.

The main reason why regulators are up in arms about these exotic investment vehicles is because of uninitiated retail investors who can get easily burned while chasing gargantuan gains.

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Playing with fire  

British investors alone lost a whopping $492 mln on crypto derivatives throughout the 2018 crypto winter. It has been estimated that this number could be dwindled to about $200 mln if prohibitive measures are implemented.

However, there is no guarantee that his ban could be effective. Jacqui Hatfield, who spearheads the fintech and technology practice for London-based law firm Orrick, is skeptical of the effort, calling it “a knee-jerk reaction.”

Crypto-derivatives are just as risky as other derivatives.”  

After all, risk-loving traders can always turn to unregulated trading where Seychelles-based BitMEX rules the roost.      

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About the author

Alex Dovbnya (aka AlexMorris) is a cryptocurrency expert, trader and journalist with an extensive experience of covering everything related to the burgeoning industry — from price analysis to Blockchain disruption. Alex authored more than 1,000 stories for U.Today, CryptoComes and other fintech media outlets. He’s particularly interested in regulatory trends around the globe that are shaping the future of digital assets.

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Ex-Congressman Says Fed Should Not Play With Own Cryptocurrency

  •  Denis Sinyavskiy
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    Former US Congressman Ron Paul shares his thoughts on the possible creation of Fed’s own cryptocurrency

Ex-Congressman Says Fed Should Not Play With Own Cryptocurrency
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Former US Congressman Ron Paul spoke on Fox Business and said that the Fed should not think about creating its own cryptocurrency.

Fed’s Crypto: To Be or Not To Be?

Rumors have been circulating for the past few months about the Fed possibly creating own cryptocurrency. It is expected that a digital coin would become a competitor to its counterparts on the market, and may even replace fiat money. President Patrick Harker, President of the Federal Reserve Bank of Philadelphia, commented on such rumors at a recent conference:

“It is inevitable. I think it is better for us to start getting our hands around it.”

However, there has not been no official follow-up by the Fed towards a crypto exchange. While proponents of this idea believe such innovation is necessary, it is expected that the exchange could stop the current delays involving US bank transfers.

What do the opponents think about the Fed's own cryptocurrency?

The idea of ​​creating the Fed's cryptocurrency has its opponents. This includes Ron Paul, who believes that the Fed is in a better position to stay away from digital coins and allow the private blockchain sector and payment platforms to resolve this discussion in real-time. What the Fed plans to do next is unclear, but the central bank may still enter the game.

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About the author

Starting with a simple interest in cryptocurrency, over the past two years, Denis has worked in a cryptocurrency fund and become an author with an analytical bias. His engineering degree helps with the analysis of the technical part of the cryptocurrency market. As a fan of cryptocurrency, Denis believes that the blockchain technology is the future.

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