Tanya Abrosimova
Independent Analyst
- BNB gains over 15% in recent 24 hours.
- Binance might introduce marginal trading for retail users.
Binance coin has been growing strongly recently amid speculations that the cryptocurrency exchange Binance might launch marginal trading. While the initiative is still in the early stages of development, Binance team is looking into a scenario where retail traders will have to maintain a stake in Binance Coin (BNB) to get access to leverage, The Block reports.
As a result, BNB gained nearly 16% on a day-on-day basis to trade at $17.39 at the time of writing. The coin has a good upside potential; however, the momentum may fade away if the market does not receive the confirmation. Many industry experts are concerned that offering marginal trading for retail customers entails high regulatory risks. overseeing authorities in many countries might be tempted to ban it especially if users lose money and flood them with complains.
Meanwhile, The Block notes that Binance has been involved in regulatory arbitrage. The company moves from one jurisdiction to another to bypass various barriers.
Also, it is worth mentioning that leveraged trading is a popular instrument that allows investors to with borrowed money. Essentially, it increases the traders purchasing power and at the same time elevates the risks for them in case the market moves in the wrong direction.
In Japan, the self-regulatory body for cryptocurrency exchanges wants to limit the leverage x4.
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