Japanese Financial Giant SBI Holdings Launches Short-Term Crypto Derivatives

Japanese financial firm SBI Holdings is launching trading for a type of cryptocurrency derivative called contracts for difference, or CFDs.

• Already live on its foreign exchange trading platform, SBI FX Trade, the contracts come in bitcoin (BTC), ether (ETH) and XRP flavors.
• The firm said in an announcement Friday that traders can pair the crypto assets with both the U.S. dollar and the yen, meaning there are six CFD choices in total.
• Orders can be placed from around 15 yen ($0.14) to a maximum open position of 500 bitcoin ($5.73 million at press time), for the BTC/JPY pair.
• SBI Holdings said it also has a mobile app for the CFD trading and orders can be placed around the clock on any day of the week.
• Users can make use of leverage – in effect, borrowing from the platform – to make trades.
• CFDs are very short-term contracts that pay the difference in price between the open and closing trades.
• They are not without controversy and a U.K. financial regulator, the Financial Conduct Authority (FCA), has said it plans to ban these types of derivatives for retail traders.
• The FCA said last year that such financial products are “ill-suited” to retail investors “who cannot reliably assess the value and risks of derivatives or ETNs that reference certain cryptoassets.”
• SBI Holdings specifically said in its announcement it will be catering to both beginner and expert traders.

Also read: Financial Firm SBI Holdings to Offer XRP Cryptocurrency as Shareholders’ Benefit