Bitcoin (BTC) and cryptocurrency exchanges in Japan volition confront pregnant restrictions on margin trading every bit soon as this Spring, according to reports.

Referencing sources at Japan's finance regulator, the Fiscal Services Bureau (FSA), local English language-linguistic communication news outlet Japan Times revealed plans to limit margin leverage to twice the total of traders' deposits.

FSA seeks to counter crypto volatility

The motility follows on from a limit of four times traders' deposits which the domestic commutation industry imposed on itself through a self-regulatory body last year.

The reason, according to the FSA sources, is to guard against periods of volatility on cryptocurrency markets.

On the timeframe for implementation, Japan Times added:

"The new rule volition be included in a Cabinet Office order linked to the revised Financial Instruments and Substitution Act which will go into forcefulness in spring."

Information technology remains unclear whether the restrictions will take effect immediately following the introduction of the Act.

A worthwhile trade-off?

Margin trading can involve significantly larger marketplace moves due to the potential size of the wins or losses, especially when big numbers of investors engage in the practise at once.

As Cointelegraph reported, the tool's affect has become a crusade of controversy for some, who aspect it to manipulation of cryptocurrency cost performance.

In Oct, data showed open interest in margin trading was at an all-time loftier in Japan.

Exchanges appeared to at least in part forecast the changes, meanwhile, with Coincheck announcing it would halt leveraged trading altogether from March.

Japan has sought to become a friendly jurisdiction for cryptocurrency, fostering permissive regulations and closely monitoring exchanges. At the same time, government take said they see no demand for a central bank digital currency, or CBDC, among consumers.