Japan has undertaken a crucial role in regards to crypto-regulations for multiple years now. In fact, Japan was the first country to regulate crypto-exchanges. This took place in 2018, a year before the FATF’s guidance on crypto-asset regulations.
Nasdaq, a leading stock exchange, has previously described Japan as “an underdog moulding the cryptocurrency industry”. They anticipate future needs and create products around issues not currently addressed. The most recent development was the announcement of having received the FATF’s approval for developing a SWIFT network for cryptocurrencies.
Another crucial facet to crypto-regulations is consumer/investor protection. In the middle of last year, a new bill was prepared by Japan’s financial watchdog, the Financial Services Agency (FSA), that determined trading guidelines, specifically for derivatives products. The latter can be very dangerous, financially, for inexperienced traders. Cryptocurrencies, in particular, have a very low barrier of entry and hence many amateur traders prefer them over other asset classes.
Although leverage goes to extraordinary levels of 100x, or even 125x on some exchanges, Japan has already limited it to a mere 4x for its exchanges. Today, Japan Times stated that the FSA is planning to cut that down by half and bring it to 2x only.
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