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UK Prohibits Crypto Assets Retail Trade due to Its Instability

7 October 2020, 16:07
Votes: 1

The Financial Conduct Authority (FCA) of the United Kingdom implements limits on crypto-derivative retail operations. The watchdog governing body insists on the unstable nature of cryptocurrencies, which can suddenly lose weight and harm. That is the reaction to the growing tendency concerning retail buying of crypto assets, which is among the primary topics in the latest cryptocurrency news.

UK Prohibits Crypto Assets Retail Trade due to Its Instability

The UK's financial organizations found that retail cryptocurrency purchase has grown in the recent year, while digital currencies can bring a lot of harm. The survey held by the Financial Conduct Authority showed a 16% interest increase in the cryptocurrencies compared to 2019 data. Thus, 31% of retail consumers bought crypto assets in the previous year, while the current level is 47%.

The authority body confirmed cryptocurrencies as unstable values that are not prepared for retail financial operations. Sharp increases and downfalls transform the procedure into some type of gambling, where the result cannot be predicted. The ban's primary target is contracts for difference (CFD), the economic derivative used in trading, but usually by experienced and prepared persons.

What is the role of Bitcoin and Ethereum in this ban?

FCA doesn't regard Bitcoin Core and Ethereum as some kind of stable assets that can be used for financial transactions. Their unpredictable fluctuations were often linked with some kind of speculation and cabals, which made them an unstable currency. Bitcoin SV tries to stay aside from such a dark reputation and even opened transactions for regulators while providing financial operations with tiny fees.

It forces us to consider FCA's step as the requirement for more transparent financial transactions related to cryptocurrencies. Since blockchain technology is used to hide all the private data during crypto trade, which has facilitated scam-related crimes, the UK's official body now tries to accelerate clearer transaction rules and protect retail customers from manipulations.

Read moreWhat is the difference between Ethereum and Bitcoin?

Read more: Are blockchain stocks worth it to invest in?

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