Subscribe
November 2, 2026
Sign In

Capitalizations Index – B ∞/21M

Menu
Breaking
Understanding Bitcoin P2PKH: The Significance of Addresses Starting with ‘1’ The Historic Publication of Bitcoin’s White Paper on October 31, 2008 Bitcoin Transaction Verification: The Role of Miners in Solving Cryptographic Puzzles The Enigma of Bitcoin: Unraveling the Identity of Satoshi Nakamoto Bitcoin Surges: Market Cap Tops $1 Trillion Record

Japanese Cryptocurrency Exchanges Plan Limits on Borrowed Margin Trading

Japanese cryptocurrency exchanges plan limits on borrowed margin trading

Japanese Cryptocurrency Exchanges Plan Limits on Borrowed Margin Trading


Japanese cryptocurrency exchanges plan limits on borrowed margin trading
Advertisement

Japan’s primary self-regulatory body for cryptocurrency exchanges is finalizing a proposal to enforce a limit on the amount of funds investors can borrow for margin trading of cryptocurrencies.

The Japan Virtual Currency Exchange Association (JVCEA) is proposing a 4-to-1 limit on margin trading wherein investors will only be allowed to borrow up to four times their original deposit, Nikkei reported Thursday.

The proposed plan, the JVCEA explained, is to limit the risk of losses faced by investors in a relatively volatile market that sees no restrictions on margin trading borrowing at the present time. The report further revealed that some domestic exchanges a leverage limit of up to 25-to-1, the default upper limit margin for foreign exchange trading.

The body is also considering exceptions under certain conditions such as effecting default circuit-breaker mechanisms based on market conditions.

While Japan’s Financial Services Authority (FSA) has taken an hands-on approach to regulating the cryptocurrency sector – domestic cryptocurrency exchanges are required to be licensed and registered by the FSA – the lack of rules in margin trading sees the cryptocurrency sector devising its own draft rules that includes bans on insider trading and plausibly restricting support for privacy-focused coins like Dash and Monero.

Launched in March, the JVCEA is a concentrated effort between Japan’s sixteen licensed cryptocurrency exchange operators to regain confidence and safeguard investors in the space following January’s $530 million hack of Tokyo-based exchange Coincheck.

According to the FSA’s own figures released in April, there are over 3.5 million active crypto traders in the country while annual trading in bitcoin soared from $22 million in 2014 to $97 billion in 2017. Pointedly, a significant majority of trading comprised of derivatives trading of cryptocurrencies, amounting to $543 billion last year.

Meanwhile, the FSA is also rumored to be looking at revising its existing regulatory framework by bringing cryptocurrency exchanges under the purview of the Financial Instruments and Exchange Act (FIEA). In such an event, the cryptocurrency industry would operate under the same laws afforded to traditional stock brokerages and securities firms.

Featured image from Shutterstock.

Follow us on Telegram or subscribe to our newsletter here.
• Join CCN’s crypto community for $9.99 per month, click here.
• Want exclusive analysis and crypto insights from Hacked.com? Click here.
• Open Positions at CCN: Full Time and Part Time Journalists Wanted.

Advertisement


Published at Fri, 27 Jul 2018 15:09:27 +0000

Exchanges

Previous Article

Worldcore Help : Account verification

 Next Article

Canadian Cryptocurrency Miner to Install 85-Megawatt Power Substation

You might be interested in …

The XYO Network Brings Blockchain to the Real World

Crypto Coin Updates The XYO Network Brings Blockchain to the Real World SAN DIEGO, CALIFORNIA, March 2018 – The XYO Network brings blockchain to the real world with its launch of the world’s first decentralized […]

Mastercard Blockchain Now Open for Payment Processing

Mastercard has opened up their own blockchain to allow payment transactions to be carried out between selected banks and merchants, but this process uses fiat currency and not bitcoin or other cryptocurrencies.

Quite a few companies have taken a keen interest in what blockchain technology has to offer, and one of these corporate entities is Mastercard, the massive credit card provider. Mastercard has spent the last few years developing its own blockchain, and now the Mastercard blockchain has been opened up as an alternative method of paying for goods and services. The major difference found in the Mastercard blockchain is that it does not use its own cryptocurrency. Instead, it uses real world money.

Mastercard Blockchain Open for Business

The Mastercard blockchain is now open for specific banks and retailers to use as a payment processing system. So far, participation in this blockchain is by invitation only. The last week has been a busy one for Fortune 500 companies and blockchain technology. IMB opened up their own blockchain earlier in the week. Probably the most intriguing aspect of the Mastercard blockchain is that it does not use its own cryptocurrency, which is something that even the IBM blockchain does.

Justin Pinkham, a senior vice president at Mastercard Labs, says:

We are not using a cryptocurrency, and we are not introducing a new cryptocurrency, because that introduces other challenges—regulatory, legal challenges. If you do a payment, then what we can do is move those funds in the way that we do today in fiat currency.

Why the Mastercard Blockchain Could be Very Successful

Some people may look at the Mastercard blockchain and shrug, but there are some factors in why it could be very successful. The first such reason is that Mastercard is lord and master of a vast financial empire, so to speak. It has a settlement network that counts 22,000 banks and financial institutions from all over the world. Few other entities have such a global reach. Another important factor is that the Mastercard blockchain only uses fiat currency, which reduces costs as there’s no need to convert one form of cryptocurrency into another and then, eventually, cash.

This reduction in cost is also amplified by reducing fees for cross-border payments. Normally, a payment that crosses national borders would have to pass through different sovereign banks, racking up fees with each step. The Mastercard blockchain would remove those steps entirely, thus making the payment less expensive and probably faster. Eventually, Mastercard’s blockchain could be used for other items, such as luxury goods to provide “proof of provenance.”

Overall, this is an interesting development. Could the lack of a cryptocurrency tie-in fire a shot across the bow of other blockchains? One also wonders how the energy use for a single transaction on the Mastercard blockchain compares to current credit card transactions and bitcoin. A Dutch bank recently reported that the average energy cost for a bitcoin transaction was 200kWh, and the cost for an Ethereum transaction was 37kWh. By comparison, a credit card transaction only incurred an energy cost of 0.01kWh.

Do you think the Mastercard blockchain will have a major impact? Does the fact that it does not use a cryptocurrency have long-lasting ramifications? Let us know in the comments below.

Images courtesy of Wikimedia Commons, Pixabay, and Flickr.

The post Mastercard Blockchain Now Open for Payment Processing appeared first on Bitcoinist.com.

Close Menu