Japan crypto leverage: Why is Japan considering higher crypto leverage limits?

Japan has moved closer to easing its cryptocurrency leverage trading rules after a senior ruling party lawmaker said the current 2x cap is too restrictive for market liquidity and price discovery. Summary Japan’s ruling party is considering easing the country’s 2x crypto leverage limit to improve market liquidity and price discovery. Lawmaker Seiji Kihara said the current restriction is too strict and backed regulatory changes for leveraged crypto trading. The proposal follows Japan’s recent decision to classify cryptocurrencies as financial products under updated financial laws. The regulatory overhaul also lays the groundwork for lower crypto taxes and domestic Bitcoin ETFs in the coming years. According to Nikkei, Seiji Kihara, who heads the Liberal Democratic Party’s Next Generation AI and On-Chain Finance Project Team, said during a financial conference in Tokyo on July 14 that Japan’s current leverage limit on crypto trading is limiting market activity and should be relaxed as part of the country’s ongoing digital asset reforms. Speaking at the event, Kihara said the existing two-times leverage cap is “too strict” and argued that a healthy market requires enough liquidity and...