Japanese Crypto Exchange Association Proposes Limit on Margin Trading Borrowing
A Japan-based self-regulatory organization comprised of cryptocurrency exchanges is proposing a limit for investors can borrow when margin trading.
It was reported by Jiji Press on Tuesday that the Japan Virtual Currency Exchange Association (JVCEA) has advised local trading platforms to impose a limit that lets investors borrow only up to four times their deposit.
The JVCEA stated that the proposition is intended to protect domestic investors seeing as there are no market rules in place to set the upper limit of in cryptocurrency margin trading.
From statistics released by Japan’s market regulator the Financial Services Agency (FSA) in April, it was revealed that there were nearly 142,000 crypto traders that were concentrated on derivatives in 2017, containing a small part from the total 3 million traders in Japan.
The statistic also shows that more than 80 percent of the entire cryptocurrency trading volume in the country in 2017 was produced by derivatives trading, which raked in over $543 billion last year. And over 90 percent of that derived from margin traders.
The group of Japanese crypto exchanges was formed after the Coincheck platform was hacked earlier this year, the JVCEA was looking to implement self-regulatory rules in an attempt to create a stable cryptocurrency trading market. The organization now has plans to send the proposal to the FSA to receive the regulator’s approval for a potential implementation on a larger scale.
Considering this, the association pointed out that the new regulation could prompt many crypto investors to abandon their exchanges. As a result, it will be implementing the measures gradually and would let exchanges set their own limits.
You may be interested
Grupo XP: Brazil’s Largest Brokage Firm To Launch Crypto Trading PlatformJoshua Tayo - September 24, 2018
Grupo XP (the largest brokage firm in Brazil) has made public its intentions to integrate the trading of cryptocurrency coins…
Ripple (XRP) Continues to Maintain Weekly Gains at 100% with More Positive NewsAdriana Midrigan - September 24, 2018
Ripple was more recently in the spotlight, as the third digital currency in the world favored by market capitalization in…
Ontology Review: What Makes Ontology Be a Trusted Network?Vladimir Ciobica - September 24, 2018
Ontology is an ambitious blockchain project launched by famous Chinese company Onchain in 2017. Its main goal is to remove…