Japan’s current regulations set out no leverage limits on a federal level for brokerages or exchanges providing trading services in digital currencies. Yet, the Japan Virtual Currency Exchange Association, a self-regulatory body of Japan’s crypto exchanges has set a limit of 4x the customer’s deposit.

As reported by Finance Magnates, the Japanese Financial Services Agency (FSA) is planning to tighten crypto margin trading in Japan by limiting leverage to a maximum of twice the deposits of traders. As such, the leverage provided would be 2:1, as commonly referred to in the Forex market. According to anonymous sources, the new rules will come into effect in spring as the regulator is planning to include them in a Cabinet Office order linked to the revised Financial Instruments and Exchange Act.

The Japanese regulator has taken the decision after studying the fluctuations of the crypto prices and the risks for traders, which are magnified by large leverages. The agency is also following the steps taken by its European and United States’ counterparts in regulating the wild industry.