On July 14, Seiji Kihara, a senior lawmaker from Japan’s ruling Liberal Democratic Party, voiced support for raising the country’s strict 2x crypto use cap. Speaking at a financial conference in Tokyo, he called the current limit too tight, restricting market liquidity and hampering effective price discovery.
Kihara heads the party's Next Generation AI and On-Chain Finance Project Team, which is working on revising crypto trading regulations to reinvigorate domestic interest and capital flow. The suggested regulatory easing aligns with Japan’s broader push this year to treat cryptocurrencies more like traditional financial products rather than just payment tools.
Steps Toward a More Active Crypto Market
Currently, Japan’s 2x use limit is among the lowest globally, preventing traders from amplifying positions beyond double their margin. Kihara argued that limited use diminishes liquidity and prevents prices from reflecting true market sentiment, slowing the growth of a vibrant crypto ecosystem.
He emphasized that loosening use restrictions would promote a healthy trading environment, which is essential to strengthening Japan’s spot in the global crypto scene. While no timeline for implementation was disclosed, the proposal fits into a recent wave of reforms that also introduced lower crypto taxation and paved the way for domestic Bitcoin ETFs.
This move follows Japan’s recent legislative changes aimed at integrating digital assets firmly into its financial system. The shift away from rules designed primarily for payment services signals growing acceptance of cryptocurrencies as investment tools.
