cryptocurrency

The Financial Services Agency aims to limit the leverage effect in trading cryptocurrency margins to double that of merchant deposits – gotech daily


Ghosn attacks the very system that crowned him

The Financial Services Agency plans to introduce a rule that limits leverage when trading cryptocurrency margins to twice the amount deposited by merchants, as announced on Friday.

Regulation, which is stricter than the industry’s fourfold self-restraint, is being introduced to reduce the risk of losses due to volatile price fluctuations.

The new regulation will be included in a Cabinet Ordinance, which is related to the revised Financial Instruments and Exchange Act and will come into force in the spring, sources said.

Among other things, cryptocurrencies are considered the payment of the future due to their low transfer fees. However, the actual use did not reflect these expectations.

Around 80 to 90 percent of transactions on cryptocurrency exchanges are speculative margin trading.

The FSA discussed leverage regulation with an industry association, the Japan Virtual Currency Exchange Association, after the revised law was passed by the state legislature last May.

The agency has set a double leverage limit based on past price fluctuations and cryptocurrency regulations in Europe and the United States.

The association plans to review its rules to reflect the new rules. Exchange operators are expected to be pressured to change their business model as the new regulations may cause speculative traders to lose interest in trading cryptocurrency margins.



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