Japan Weighs Higher Crypto Leverage Limits Amid Regulatory Overhaul

Japan is considering revising its cryptocurrency leverage trading rules to allow for higher limits. The current limit of 2x is seen as too restrictive by Seiji Kihara, a senior ruling party lawmaker who heads the Liberal Democratic Party's Next Generation AI and On-Chain Finance Project Team.

Kihara argued that the existing two-times leverage cap is 'too strict' and hinders market activity. He believes that relaxing this restriction would help improve liquidity and price discovery in Japan's cryptocurrency market.

The proposal to ease leverage limits follows recent changes to Japan's financial laws, which reclassify cryptocurrencies as financial products rather than payment instruments. This change lays the groundwork for lower crypto taxes and domestic Bitcoin ETFs in the coming years.