News On Japan

Japan’s crypto exchanges are pushing for looser margin trading rules to help the sector grow

Jun 20, 2023 (Business Times) - Japan's crypto exchanges are pushing for a relaxation of curbs on margin trading, unbowed by last year’s global digital-asset market crash.

Many people in the industry want permitted leverage for retail investors of four to 10 times whereas currently customers can at most double exposure via borrowing, according to the Japan Virtual & Crypto Assets Exchange Association.

“Reforming the leverage rule could make Japan more attractive for crypto and blockchain companies,” the association’s vice chairman Genki Oda said in an interview, adding that the step would encourage more trading.

The nation’s digital-asset exchanges are in talks to reach a consensus on a recommended leverage limit and may take their proposal to the Financial Services Agency (FSA) as soon as next month, Oda said.

Japan has moved towards easing some crypto rules, such as on token listing and taxation, but overall is viewed as having strict regulations. That focus on investor protection enabled the Japanese arm of failed exchange FTX to return money to clients earlier this year even as the group’s US bankruptcy drags on.

An FSA official said crypto firms must present convincing reasons why loosening margin trading caps will help the government achieve its goal of expanding blockchain-based industries. The agency is open to discussing the issue with digital-asset businesses, the official added. ...continue reading

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