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Key facts (as of 29 October 2026)
- Losses: EU national regulators found 74–89% of retail CFD accounts typically lose money, with average losses per client of €1,600 to €29,000 (ESMA, 27 March 2018).
- EU product rules: leverage limits from 30:1 to 2:1, depending on the underlying. Margin close-out at 50% of minimum required margin. Negative balance protection. A ban on incentives. Standardised risk warnings. Binary options were prohibited for retail clients.
- UK: the FCA made equivalent restrictions permanent from 1 August 2019 (PS19/18).
- Australia: ASIC's CFD product intervention order took effect on 29 March 2021 and was extended to 23 May 2027. In October 2026 ASIC proposed a further extension and amendments, including treatment of digital-asset-settled CFDs (ASIC media release 26-239MR).
- Card treatment: high-integrity-risk financial trading platforms (MCC 6211, card-absent) are Visa Tier 3. Visa lists "Unlicensed Foreign Exchange Trading or Binary Options" under gambling MCC 7995.
- Processor access: mainstream processors such as Stripe and Square decline the category (FinSet).
Leverage caps by regulator
| Underlying | ESMA (EU) | FCA (UK) | ASIC (Australia) |
|---|---|---|---|
| Major currency pairs | 30:1 | 30:1 | 30:1 |
| Minor pairs, gold, major indices | 20:1 | 20:1 | 20:1 |
| Other commodities, minor indices | 10:1 | 10:1 | 10:1 |
| Individual shares and other assets | 5:1 | 5:1 | 5:1 |
| Crypto-assets | 2:1 | Crypto derivatives banned for retail since January 2021 | 2:1 |
Sources: ESMA (2018), FCA PS19/18 and the FCA's 2020 crypto-derivatives ban, ASIC 20-254MR. The UK permanent rules cover CFDs from 1 August 2019 and CFD-like options from 1 September 2019.
The ESMA measures
In March 2018 ESMA agreed EU-wide measures on CFDs and binary options for retail investors. ESMA said they would "for the first time ensure that investors cannot lose more money than they put in". Leverage caps vary by the volatility of the underlying. The tightest cap, 2:1, applies to crypto-assets. The intervention set a common minimum that national regulators then built on.
| Measure | Purpose |
|---|---|
| Leverage limits (30:1 to 2:1) | Cap exposure relative to the deposit |
| Margin close-out at 50% | Close positions before losses exceed the account |
| Negative balance protection | Clients cannot lose more than deposited |
| No incentives | Stop bonuses that encourage trading |
| Standard risk warning | Show the firm's own share of losing accounts |
Why brokers are high-risk to payment providers
- Disputed deposits. Clients who lose may dispute card deposits, which pushes up VAMP ratios.
- Cross-border marketing. Offshore entities marketing into markets where they are not authorised.
- Fraud. Unlicensed "brokers" are a common investment-scam vehicle, which taints the whole category. The FATF's July 2026 update describes a Spanish Guardia Civil case involving about €460m taken from more than 5,000 victims.
- Category de-risking. Capitalixe argues that many closures are sector-level policy decisions rather than reviews of individual firms. See De-risking.
Payment needs
| Need | Notes | Fit for stablecoins |
|---|---|---|
| Client deposits | Cards, bank transfers and local methods. Card deposits under MCC 6211 | Only where the licence permits; suitability and KYC apply |
| Client withdrawals | Fast, traceable, usually back to the source of funds | Return-to-source rules usually point back to fiat |
| Liquidity provider settlement | Margin with prime brokers and liquidity providers, often cross-border | Strong fit where both sides accept it |
| Affiliate and IB payments | Introducing-broker commissions across many countries | Strong fit, with screening |
| Intra-group treasury | Moving capital between licensed entities | Possible, with each regulator's capital rules in mind |
flowchart LR
CL[Retail clients] -- Cards, bank transfer --> BR[Broker client money account]
BR -- Segregated per client money rules --> CM[(Client money)]
BR -- Hedging margin --> LP[Liquidity providers]
BR -- Commissions --> IB[Introducing brokers and affiliates]
LP -. B2B stablecoin settlement possible .- BR
IB -. B2B stablecoin settlement possible .- BRNoteB2B legs such as liquidity-provider margin and affiliate payouts are the most natural fit for stablecoin settlement. Client-facing stablecoin deposits raise separate licensing, suitability and KYC questions under the broker's own authorisation.
WarningA licence from one regulator does not permit marketing into another market. Payment rails do not change that. Client money rules also usually require client funds to be held with approved banks, not in a broker's crypto wallets.
Jurisdiction breakdown
| Jurisdiction | Regulator | Key payment-relevant point |
|---|---|---|
| EU | National authorities under MiFID II, with ESMA coordination | Product intervention measures; CASP authorisation needed for crypto services since 1 July 2026 |
| United Kingdom | FCA | Permanent CFD restrictions; retail crypto derivatives ban; cryptoasset regime from 25 Oct 2027 |
| Australia | ASIC | CFD order to May 2027, with extension proposed in October 2026 |
| Cyprus | CySEC | Common EU base for brokers passporting across the EEA |
| Offshore | Various | Higher de-risking risk; banks scrutinise marketing into restricted markets |
Illustrative example: affiliate payouts
Illustrative example. Figures are invented.
An FCA- and CySEC-licensed broker pays 1,200 introducing brokers each month, totalling about US$3m, in 40 countries. Bank wires cost an average of US$25 each and take two to four days; several partners in emerging markets have bank accounts that reject inbound broker payments. The broker offers USDC payouts on Ethereum or Solana to partners who pass KYB and wallet screening, with Travel Rule data sent through its licensed provider. Partners who choose USDC are paid on the first business day; those who prefer fiat keep wires. The broker's client money arrangements are untouched.
Timeline
| Date | Event |
|---|---|
| 27 Mar 2018 | ESMA agrees binary options ban and CFD restrictions |
| 1 Aug 2019 | FCA permanent CFD restrictions apply |
| 6 Jan 2021 | FCA ban on retail crypto derivatives applies |
| 29 Mar 2021 | ASIC CFD product intervention order takes effect |
| April 2022 | ASIC extends its order to 23 May 2027 |
| 1 Jul 2026 | MiCA transitional period ends EU-wide |
| October 2026 | ASIC proposes extending and strengthening its CFD order |
Q/A
Why do brokers struggle to keep bank accounts?
Banks cite investor-harm and fraud exposure, and often apply category-wide policies. UK tipping-off rules can stop them explaining specific closures.
Are crypto CFDs treated differently?
In the EU and Australia, crypto CFDs carry the lowest leverage cap, 2:1. In the UK, crypto derivatives cannot be sold to retail clients.
Can a broker accept stablecoin deposits?
It depends on its licence. Even where allowed, suitability tests, KYC and client money rules still apply.
Why does Visa code binary options as gambling?
Visa's 7995 listing includes "Unlicensed Foreign Exchange Trading or Binary Options". Licensed trading platforms use 6211.
What evidence helps a broker keep its bank?
Licence details, marketing controls by country, client money reconciliations, complaint and dispute statistics, and a clean AML record.
Do the ESMA measures still apply?
ESMA's measures were temporary; national authorities adopted their own permanent measures based on them.
Sources
- ESMA, CFD and binary options measures (27 March 2018): https://www.esma.europa.eu/press-news/esma-news/esma-agrees-prohibit-binary-options-and-restrict-cfds-protect-retail-investors
- FCA, PS19/18 restricting CFD products: https://www.fca.org.uk/publications/policy-statements/ps19-18-restricting-contract-difference-products
- FCA, ban on crypto derivatives for retail consumers (6 October 2020): https://www.fca.org.uk/news/press-releases/fca-bans-sale-crypto-derivatives-retail-consumers
- ASIC, 21-060MR CFD product intervention order takes effect: https://www.asic.gov.au/about-asic/news-centre/find-a-media-release/2021-releases/21-060mr-asic-s-cfd-product-intervention-order-takes-effect
- ASIC, 22-082MR order extended for five years: https://www.asic.gov.au/about-asic/news-centre/find-a-media-release/2022-releases/22-082mr-asic-s-cfd-product-intervention-order-extended-for-five-years
- ASIC, 26-239MR moves to extend and strengthen CFD protections (October 2026): https://www.asic.gov.au/about-asic/news-centre/find-a-media-release/2026-releases/26-239mr-asic-moves-to-extend-and-strengthen-cfd-consumer-protections
- FATF, targeted update (July 2026): https://www.fatf-gafi.org/en/news/targeted-updated-va-vasps-2026.html
- Capitalixe (28 May 2026): https://capitalixe.com/blog/forex-broker-debanked/
- FinSet, payments for CFD brokers: https://fin-set.com/payments-for-cfd-brokers
- Visa, Visa Merchant Data Standards Manual (October 2026): https://usa.visa.com/dam/VCOM/download/merchants/visa-merchant-data-standards-manual.pdf
- ASIC, 20-254MR product intervention order strengthens CFD protections (leverage limits by asset class): https://www.asic.gov.au/about-asic/news-centre/find-a-media-release/2020-releases/20-254mr-asic-product-intervention-order-strengthens-cfd-protections
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