Japan’s crypto exchanges push for relaxed margin trading rules to attract new investors

2023-6-20 14:25

Cryptocurrency exchanges in Japan have urged the authorities to loosen the regulations surrounding margin trading activities, according to a June 20 Bloomberg News report.

JVCEA eyes higher leverage limits

Japan Virtual and Crypto Assets Exchange Association (JVCEA), a body tasked with self-regulating the crypto industry, argued that its members want higher leverage limits for retail investors of up to 10 times their principals to boost market growth and attract newer participants.

JVCEA Vice Chairman Genki Oda told Bloomberg that the move “could make Japan more attractive for crypto and blockchain companies,” adding that it would encourage more trading activities.

Oda further noted that the exchanges could help investors effectively manage the risks of margin trading positions through enhanced risk management tools and investor education. He added that they are deliberating on the leverage limit and would push their decision to Japan’s top regulator, the Financial Services Agency (FSA).

Meanwhile, an unnamed official of Japan’s FSA reportedly said the crypto firms must justify how relaxing margin trading caps support the government’s aim of expanding blockchain-based industries.

Japan maintains strict crypto regulations

Japan is one of the few countries that has maintained strict crypto regulations. The regulatory framework was crucial in safeguarding FTX Japan customers’ funds from the parent company’s bankruptcy.

Early this month, the country introduced new regulations that require crypto exchanges to share customer information to crack down on money laundering activities. However, Nikkei Asia reported that implementing the rule has some loopholes affecting its effectiveness.

Despite these moves, authorities in the Asian country have moved to make it a reasonably crypto-friendly country. Last year, Japan lifted its ban on foreign-issued stablecoins and launched a central bank digital currency (CBDC) pilot program earlier this year.

The Asian country also funds the development of metaverse and NFT-related projects through government investments.

The post Japan’s crypto exchanges push for relaxed margin trading rules to attract new investors appeared first on CryptoSlate.

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