Cryptocurrency and blockchain industry officials have expressed their displeasure at proposed leverage capping at Japanese exchanges – as a consultation period deadline approaches.
The country’s financial regulator, the Financial Services Agency (FSA), has put forward a proposal that would – as previously reported – seek to place a x2 leverage cap on margin trading at the nation’s licensed exchanges.
Japanese exchanges appear to have attempted to preempt the FSA’s move last year, self-imposing a x4 leverage cap.
But the FSA appears to want more, and the consultation period ends on February 13. Media outlet Next Money reports that there has been a “lot of opposition from cryptocurrency and blockchain industry officials and investors,” and notes that “x2 leverage” has trended on Twitter and other social media platform in Japan.
But Gina Kim, a South Korean security expert who works with a number of Japanese corporate clients, said she believes the regulator is unlikely to be stopped at this stage. She told Cryptonews.com,
“I can’t see the FSA changing its mind on this unless it has heard some pretty convincing arguments. It seems keen to marginalize what it sees as cryptocurrency speculation.”
A number of Japanese exchange operators now seem resigned to their fate. As previously reported, GMO Coin’s operator recently stated that it would compensate for the new cap limits by “increasing the size” of its “user base” this year.
Observers have called the cap unfair, and point to the fact that FX trading platforms in the country can currently offer margin trading with a leverage limit of x40.Watch the latest reports by Block TV.
Should the FSA decide in favor of introducing the x2 cap, the regulator would likely need until spring to complete the required legal process – meaning the new cap could be enforced as early as summer this year.