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.

Speaking at a financial summit in Tokyo, Seiji Kihara said the current two-times leverage cap on crypto trading is overly restrictive and that he intends to pursue regulatory relief, the Nikkei newspaper reported on July 27.

"Adequate liquidity and a functioning price mechanism are essential for the healthy development of the crypto market," Kihara said. "Regulatory easing is an inevitable trend."

Kihara currently heads the LDP's project team on next-generation AI and on-chain finance. The team is pursuing regulatory changes aimed at boosting liquidity in the crypto market and drawing related funds, including overseas capital, into Japan.

As Japan works to strengthen the competitiveness of its cryptocurrency industry, leverage rules are set to be among the key areas for regulatory reform.