The Nikkei stated that the amendments are being made with the aim of expanding Japanese regulations on the process of crypto trading. The financial laws being amended include the Financial Instruments and Exchange Act and the Payment Services Act, while the new regulations will also recommend that the existing term ‘virtual currencies’ be changed to ‘crypto assets.’
Lawmakers in Japan initiated the discussion on introducing regulations on cryptocurrency margin trading earlier this year in March. The cabinet had earlier endorsed draft amendments to the two aforementioned laws.
The new regulations stated that cryptocurrency margin trading will be capped at 2 – 4 times the initial deposit. Margin trading is the utilization of funds borrowed from a broker with the aim of being used in financial asset trading, which then becomes collateral for the loan.
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