Belgium Regulator FSMA Issues Ban Of Virtual Currency-Based Derivatives Effective July 1

The Financial Markets and Services Authority (FSMA) has announced a new regulatory edict that will effectively ban the use of derivatives based on virtual currencies such as Bitcoin Bitcoin While some may still be wondering what is Bitcoin, who created Bitcoin, or how does Bitcoin work, one thing is certain: Bitcoin has changed the world.No one can remain indifferent to this revolutionary, decentralized, digital asset nor to its blockchain technology.In fact, we’ve gone a long way ever since a Florida resident Laszlo Hanyecz made BTC’s first official commercial transaction with a real company by trading 10,000 Bitcoins for 2 pizzas at his local Papa John’s.One could now argue that While some may still be wondering what is Bitcoin, who created Bitcoin, or how does Bitcoin work, one thing is certain: Bitcoin has changed the world.No one can remain indifferent to this revolutionary, decentralized, digital asset nor to its blockchain technology.In fact, we’ve gone a long way ever since a Florida resident Laszlo Hanyecz made BTC’s first official commercial transaction with a real company by trading 10,000 Bitcoins for 2 pizzas at his local Papa John’s.One could now argue that Read this Term as of July 1, 2014, according to an FSMA statement.

Belgium’s paramount regulatory organization FSMA has been keen to police a variety of financial instruments as of late, including binary options. However, the most recent FSMA regulatory announcement takes a far more pointed stance towards virtual currencies.

Derivatives Potentially Amplifying Risks Of Virtual Currency Trading?

The announcement comes on the heels of a warning from both FSMA and the National Bank of Belgium, which outlined the potential risks associated with virtual currencies such as Bitcoin. These included an overall prevalence for operating risk, hacking virtual currency platforms, exchange rate risks and Volatility Volatility In finance, volatility refers to the amount of change in the rate of a financial instrument, such as commodities, currencies, or stocks, over a given time period. Essentially, volatility describes the nature of an instrument’s fluctuation; a highly volatile security equates to large fluctuations in price, and a low volatile security equates to timid fluctuations in price. Volatility is an important statistical indicator used by financial traders to assist them in developing trading systems. Trad In finance, volatility refers to the amount of change in the rate of a financial instrument, such as commodities, currencies, or stocks, over a given time period. Essentially, volatility describes the nature of an instrument’s fluctuation; a highly volatile security equates to large fluctuations in price, and a low volatile security equates to timid fluctuations in price. Volatility is an important statistical indicator used by financial traders to assist them in developing trading systems. Trad Read this Term, and the lack of legal guarantee for actual face value. For these reasons, FSMA has sought to curb the use of virtual currencies related to derivatives, which it believes can potentially exacerbate these risks.

Despite news of the announcement permeating would-be investors and virtual currency users alike, the price of Bitcoin seemed unruffled by the news, jumping 10% today. Ultimately, it remains to be seen if FSMA’s regulatory stance will be adopted by other European countries.