Japan Wants More Crypto Trading Power

Japan is thinking about letting people trade cryptocurrencies with more borrowed money. Right now, traders can only use double the amount of their own money as a limit. Some lawmakers say this rule keeps the market small and slows how prices find their true value. During a Tokyo conference on July 14, Seiji Kihara, who leads a government team on AI and blockchain, said the 2× rule is too tight. He believes a lively market needs enough cash flow and fair price setting. If Japan loosens the rule, more investors might bring capital back to local crypto exchanges. The discussion fits into a larger plan. Last month, Japan changed its laws so that cryptocurrencies are treated like other financial products, not just payment tools. New rules now cover insider trading, yearly reports from crypto issuers, and tougher penalties for unregistered businesses. The penalties could jump up to 10 years in prison or a fine of 10 million yen. Tax changes are also coming.

Crypto profits will be taxed at about 20 %, and losses can be carried forward for three years. These tax rules will start in 2028, after the government finishes its preparations. Japan is also moving toward crypto exchange‑traded funds (ETFs). The authorities plan to let ETFs hold cryptocurrencies directly, possibly launching a Bitcoin ETF by 2028. Large banks and investment firms are already preparing such products. All these steps show Japan’s broader push to grow its digital‑asset industry. The prime minister said Web3 is part of the country’s national innovation strategy, not just a crypto fad. Startups and investors are encouraged to work together, even though no new funding or rules were announced yet. If the leverage limit is lifted, it will be another change after the new product classification and tax reforms. For now, Kihara’s team is still drafting proposals to boost market liquidity and bring more crypto trading back home, but no timeline has been set.

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