Binance Launches High-Leverage Perpetual Future on USDBRLUSDT

Binance has announced that it will launch a perpetual future on the USDBRLUSDT currency pair, which tracks the price of the US dollar against the Brazilian real but settles in USDT. The product offers up to 100x leverage and continuous trading, including at weekends.

The launch is part of Binance's TradFi Perpetual product category, which has already seen other currency pairs introduced with similar characteristics. Shunyet Jan, responsible for exchange and trading at Binance, justified the move by stating that foreign exchange is a fundamental market where hedging and macro views are expressed at all hours.

However, the high leverage offered on this product raises concerns about its suitability for retail investors in Germany. BaFin's general administrative act of July 23, 2019, prescribes a minimum initial margin and prohibits bonus incentives for contracts marketed to retail clients in Germany. The leverage caps depend on the underlying, with a maximum of 30:1 for major currency pairs.

Binance is holding out 100x leverage on this product, which is five times higher than what BaFin permits for German retail investors. This has sparked concerns about the risk of losses and the potential for Binance to be classified as marketing a contract for difference to German retail clients without adhering to BaFin's regulations.