Japan’s JVCEA Plans to Limit Crypto Exchange Margin Trading


Japan’s JVCEA plans to limit crypto exchange margin trading for the members of the organization. The initiative can become effective already within a month, in case the idea receives enough support.

26 July, AtoZ Markets – The Japan Virtual Currency Exchange Association (JVCEA) has revealed it plans to restrict members of the organization regarding margin trading activities. The news about the initiative of Japan’s self-regulatory crypto body comes from one of the local media reports.

Japan’s JVCEA Plans to Limit Crypto Exchange Margin Trading

Margin trading is a practice of borrowing money from the brokerage that is utilized by cryptocurrency traders for purpose of buying or selling more assets that they could afford on their own. This is done in a bid to increase their potential profits. However, at the same time, the amount of potentially lost funds is also increased. 

The Japanese self-regulatory body has been officially established earlier this year. Its latest initiative includes the limitation of the amount that margin traders can borrow. The JVCEA proposed capping this number at four times the amount of their investment. 

Local reports stated that the association is looking into the prevention of losses that crypto investors would suffer in case of a sudden price fluctuation of a particular cryptocurrency. It is also known that the organization plans to implement this rule within a month in case the initiative gets enough support. 

Japan’s Crypto Regulation Overhaul

In the meantime, Japan has made changes to the way its financial regulator, the Financial Services Agency (FSA) operates. Thanks to the overhaul of FSA’s ecosystem, now, the regulator is better equipped to deal with fintech-related sectors, this including cryptocurrencies.

According to local media outlets, changes were performed in relation to various departments in order to make the organization better suited to address the new issues and challenges within the financial sector.

The newly created Strategy Development and Management Bureau has replaced the Inspection Bureau. The department will reportedly work on the development of the financial strategy policy and manage issues that are related to the digital currencies market, money laundering and Fintech. In addition, the bureau will be responsible for administrative duties and oversight of financial institutions. 

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