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#1 31-07-2020 21:18:31

johnedward
Admin & Trader
From: Paris - France
Registered: 21-12-2009
Posts: 2855
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Can the United States become a haven of peace for forex brokers?

Can the United States become a haven of peace for forex brokers?


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The United States has always been a source of problems for forex brokerage firms. On the one hand, it is the largest and most lucrative market. On the other hand, US regulations related to the forex in general and brokers in particular have always been so strict, that only a few brokers have been concerned about the US market. And even fewer have managed to obtain appropriate licenses. But it seems that things are about to change.

There is a real chance that the US will soon lose its reputation as an extremely difficult market and become a haven for the largest forex brokers. How did this change come about?

As usual, there is not a single determining factor, but a combination of factors. Some of them could cause the US government to be more lenient towards forex brokers, others could make life for brokers outside the US much worse than it is now, and still others could cause more brokers to give the US another chance.

U.S. might ease its harsh regulations

To be fair, that's the most controversial part. On the one hand, US market authorities have several very good reasons for letting more American brokers operate there.

On the one hand, the US economy is in pretty poor shape. Fundamental problems and disparities, combined with a pandemic and civil unrest, have led to an economic crisis in its own right. And the most tried and tested solution is to ease the regulatory pressure on the economy as a whole and on the financial sector in particular.

Second, the trade war with China isn't over yet. And China is taking full advantage of offshoring, forex and differences in legislation. So the U.S. government is actually interested in greater acceptance of the forex market. In this way, America could deny China one of its greatest advantages.

But at the moment, we don't see that happening. On the contrary, the CFTC has introduced new regulations that are even stricter than before.

On the other hand, there is no need for the U.S. government to formally relax regulations. Committees could become much more lenient towards brokers, even under the current U.S. rules. And we can see that such a trend is beginning to develop.

Kraken - the largest regulated US crypto market, ventured into the forex market just 4 months ago. And even though US regulators are extremely suspicious of anything to do with cryptos such as the Bitcoin, they gave Kraken the green light.

The regulation may therefore remain the same, but the attitude of the regulators can easily change - the trend is already visible.

Regulations in other countries are deteriorating

The irony is that when the U.S. shows a more relaxed attitude towards the forex, the rest of the world seems to be heading in the opposite direction. For the whole of last year and the first half of this year, brokers around the world have been the focus of government attention.

Basically, a crackdown has been taking place everywhere outside the United States over the last year.

Arrow Europe and Canada started with forex futures brokers, and then there was a kind of purge of the industry - licenses were revoked, brokers were fined, and criminal investigations were launched.

Arrow Russia has revoked the licenses of some of its largest brokers.

Arrow In China and Africa, many brokerage firm executives and employees have been arrested, a few traders have as well!

Most forex brokers don't have US operations, because it's too much of a hassle dealing with US regulations. But today, the world is changing - the rules are getting stricter and stricter everywhere else. So the U.S. market is starting to be much more attractive: and it still has bucketloads of money.

So the United States could become a safe haven, not because it's that good, but because all the alternatives are slowly getting worse. And faced with a dilemma: "strict rules and lots of money" or "strict rules and little money", most brokers will choose the former.

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