Japan Ruling Party Lawmaker Pushes to Ease Crypto Leverage Cap

A lawmaker from Japan's ruling Liberal Democratic Party called for easing leverage rules on cryptocurrency trading.

Nikkei reported on July 27 that Seiji Kihara, a Liberal Democratic Party lawmaker, told a financial summit in Tokyo the current 2x leverage cap on crypto trading is overly restrictive and that he intends to pursue looser rules.

"The healthy development of the crypto market requires sufficient liquidity and a functioning price mechanism," Kihara said. "Regulatory easing is an unavoidable trend."

Kihara leads the party's Next-Generation AI and On-Chain Finance Project Team. The group is working on regulatory changes aimed at increasing liquidity in the crypto market and drawing related capital, including from overseas, into Japan.

As Japan moves to strengthen the competitiveness of its crypto industry, leverage rules are set to be one of the key issues in future regulatory changes.