The bill regulating cryptocurrencies moves on to the house of councilors after two major amendments in the lower house.
Japan leads the world in the regulation of cryptocurrencies across the world today, followed closely by Singapore. The government and other regulatory authorities across the country have taken a pro-active approach in regulating digital assets and blockchain technology in the past few years leading to more countries working on the regulation.
An announcement from one of the leading financial media houses, Nikkei, confirms additional regulation on the bill governing cryptocurrency assets in the country.
The announcement on the news website confirms that the bill for the revision of the Funds Settlement Act and the Financial Instruments and Exchange Act was passed to the upper house, the National Diet. Japan’s regulation of cryptocurrencies and related assets was first brought to light in 2011 and has since been amended regularly to cover the scope of the industry better.
Amendments to the “cryptocurrency bill”
The latest amendment to the bill that tightened up regulations on virtual currency exchange traders and transactions introduces two major changes on the regulation of cryptocurrencies. First, the bill recommends a change of terms from virtual currency to cryptographic assets in a bid to clearly define cryptocurrencies. Secondly, the bill amendments focuses on the regulation of margin trading on cryptocurrencies.
The term “virtual currencies” lives on across media houses and other financial news outlets. However, the Cabinet head of Finance and deputy prime minister Taro Aso, is urging the media to start using the approved terms to refer to cryptocurrency assets.
The margin trading laws on cryptocurrencies in the Financial Instruments and Exchange Act was first brought to parliament in March and received approval from the Cabinet of Japan.
Margin trading on cryptocurrencies is a risky strategy given the wild volatility experienced in cryptocurrency markets. The amendment states the leverage for margin trading on crypto exchanges will be set at 200X-400X the initial deposit.
BitFlyer begins implementation of the new rules
One of Japan’s largest cryptocurrency exchanges, BitFlyer, announced changes conforming to the new guidelines placed by the lawmakers. The exchange is set to complete the changes by the end of the month and users are encouraged to follow through with the changes.
Some of these changes include reducing the highest leverage rate permitted when placing new orders from 15x to 4x, margin calls will be made if the maintenance margin reduces below 100% (up from 80%) and finally the margin call deposit time from banks is reduced to 2 days from 3 days.