The financial watchdog of Japan, the Financial Services Agency (FSA) just certified 2 local organizations and handed them the title of Certified Financial Instruments and Exchange Associations.
The announcement was made on April 30 and the titles were offered to the Japan Virtual Currency Exchange Business Association (JVCEA) and the STO Association. They are now official self-regulatory groups that can work with derivative transactions and even security token offerings associated with cryptocurrency assets. The JVCEA will also be renamed on May 1, with the name being the “Japan Crypto Asset Trading Business”.
The JVCEA is authorized to create policies and regulations for the cryptocurrency exchanges that operate in Japan. From March, there are 21 licensed and registered crypto exchanges in the country, with 3 extra companies being added as being second-class members. These are Digital Asset Markets, Tokyo Hash and Coinbase.
In January 2020, the Japan FSA proposed cutting leverage caps for margin trading in the cryptocurrency industry. It was reported that the plan was to put everything into practice in the month of April, after a version of the Japanese Financial Instruments and Exchange Act is revised.
The JVCEA put into effect a 4X leverage cap for 2020. After this, the cryptocurrency exchanges of Japan reduced rates. There are local economic experts that suggested the fact that this rate should be put down to 2X to match the other European Union jurisdictions.