Cryptocurrency supporters in Japan suggest increasing the leverage limit applied to cryptocurrency transactions.
The Crypto Asset Business Association (JCBA) in Japan has submitted a bill to the JVCEA to reconsider the leverage limit applied to cryptocurrencies.
Founded in 2016, JCBA works to contribute to the growth of the cryptocurrency industry in Japan. JVCEA is working with the country’s regulator, the FSA, on the supervision of the cryptocurrency market.
Individual investors in Japan have been trading cryptocurrencies in recent years. Up to 25x leverage He could use it. This upper limit is in October 2019 to 4 floors; Increased to 2 floors in May 2020 was reduced to .
Regarding leverage in cryptocurrencies, according to JCBA representatives to traditional financial instruments The fact that stricter pressure is applied than before negatively affects the development of the cryptocurrency industry. In the bill submitted to JVCEA, “In order for crypto assets to qualify as an official asset class, the derivative market must be developed as well as the spot market.” emphasis was made.
Once this restriction began to be implemented in the country, there was a decrease in open positions, and especially margin transactions experienced a greater shrinkage compared to spot transactions.
According to JCBA representatives, this upper limit is limited to investors in Japan. be able to use more leverage to turn to stock exchanges abroad and damage to local stock markets It leads.
According to CoinPost, JCBA’s suggestions were transferred to JVCEA for evaluation.