Our Interview with FXOpen: One of the First Foreign Exchange Trading Platforms to Embrace Bitcoin
1. You are one of the first foreign exchange trading platforms to embrace bitcoin, what did you find interesting about bitcoin and cryptocurrencies?
Bitcoin is a very hot product right now and we were simply unable to ignore an instrument as popular as this. Plus we are sure that clients would feel more comfortable trading on such a popular and user-friendly platform as MT4 combined with using cutting edge technology with a reputable and regulated company such as ourselves.
2. What has been the response from your traditional forex customers?
Our existing forex customers have expressed an interest in bitcoins, however, it is not nearly as big as the interest from the Bitcoin trading community. Cryptocurrency traders already have the chance to assess the benefits of trading with FXOpen and the number of accounts we see opening every day has grown tremendously. Our forex client base mostly consists of high frequency traders, for whom there is simply not enough volatility in the Bitcoin market at the moment. Moreover, they are used to trading with razor-thin spreads and low commissions, but we definitely believe that due to the growing interest we are seeing, Bitcoin will become more liquid and affordable for the end-user and will attract more forex traders.
3. What challenges did your team face in integrating cryptocurrencies?
Our system is very universal and flexible which allows us to integrate new instruments pretty quickly. However, Bitcoin is a completely new product with very particular technical settings which required additional development on our side. Our engine and back-end have been adjusted in order to ensure we are able to integrate the bitcoins quickly both for retail and institutional clients as well as offering crypto-liquidity to bigger market players.
4. What differentiates FXOpen from your competitors?
We are the only team at the moment to offer the exchange model of Bitcoin trading among forex companies. What our competitors offer is technically betting on Bitcoin price movements, which potentially might lead to the conflict of interests between the trader and the broker. Secondly, we are regulated. Third, our technology allows us to offer the best pricing and consistent execution model to all of our clients which is crucial for the success of trading strategies.
Recently we have also started offering price-maker rebates to the clients in order to increase the internal liquidity. Should a client place a limit order which has been filled, he or she will be rebated a percentage of the commission paid.
5. In the wake of the Mt Gox scandal, how did you design your system to ensure that customer funds are properly protected?
FXOpen has been in the market since 2003. The fact that the FXOpen Group have ASIC and FCA regulated companies speaks for itself (FXOpen Limited and FXOpen Au Pty Ltd).
Client funds are obviously held in segregated accounts and separated from the company’s operational funds. However, there are always risks of losing the funds held with a liquidity provider in case it goes bankrupt. So we follow a very strict due diligence procedure in order to choose only the most reliable partners as our LPs.
Finally, we operate an exchange only model without internalizing the flow thus not carrying any trading risks.
6. What do you think the future holds for foreign exchange trading and bitcoin?
The FX business is changing rapidly – the introduction and fast-growing popularity of cryptocurrencies is proof of this. Over the last decade we have seen forex, a traditional over-the-counter product, moving quickly towards the exchange model. We believe the same will happen to bitcoins and we are proud to be among the pioneers of this move. We are certain that technology is the key factor contributing to the efficiency of the exchange model and thus it is our aim to deliver the most technologically advanced trading environment both to our forex and Bitcoin traders.