Japan, arguably the world’s leader in cryptocurrency regulation, is set to drop more rules on the industry by capping leverage trading on cryptocurrency exchanges.
Japanese regulators approved on Friday amendments to Japan’s financial instruments and payment services laws that limit the amount of leverage cryptocurrency exchanges may offer users when margin trading. The cap will now be two-to-four times initial deposits — in line with foreign exchange (forex) trading — according to a report from Nikkei Asian Review.
As expected, cryptocurrency exchanges that offer margin trading will now be required to obtain approval from the Japanese government via registration. The registration process, however, will be distinctly different from the already-existing process created in 2017 that officially recognized digital currencies as legal tender.
The new regulations will force cryptocurrency exchanges to accept monitoring in line with securities traders.
The regulatory move comes after speculative trading on margin started…