Japan is a country that is supposed to be well-regulated and efficient when it comes to business activities. Very much unlike its neighbor to the north, the country is reportedly known for its efficiency when it comes to running a business. Despite this, the Japan Financial Services Agency (FSA) has come under fire for poorly regulating cryptocurrency exchanges in the country.
Japan’s Financial Services Agency (FSA) has admitted that the process of operating a crypto exchange in the country is “rather tough” but it is “making efforts to achieve the goal of strengthened financial system”. Speaking at a news conference, the head of the FSA’s virtual currency unit, Toshihide Endo, said that the agency is examining how to issue virtual currency exchange licenses, including a “common application system” for the third-party applications that help run them, to ease the burden on operators.
There are more than two dozen cryptocurrency exchanges operating in Japan, but they face a lot of obstacles in the market. While the government is relatively relaxed about cryptocurrencies, they are still technically a financial instrument. Most exchanges are based in Japan, so they also need to comply with local laws.. Read more about is cryptocurrency legal and let us know what you think.
Junichi Nakajima, the new commissioner of Japan’s Financial Services Agency (FSA), thinks the government should think twice before making Bitcoin (BTC) and other cryptocurrencies more widely available.
In an interview with Bloomberg, Nakajima thinks that crypto assets like Bitcoin have the potential to help the general people as a fast and inexpensive method to move money. The majority of crypto assets, on the other hand, are presently utilized for speculation and investing.
As a result, the Japanese authority thinks that careful thought is needed before making crypto assets more accessible to the general public. The extreme volatility of crypto markets due to the lack of underlying assets, according to Nakajima, is one of the main reasons why the Japanese regulator has refused to authorize crypto investment trusts.
Following the notorious cyber assault on Tokyo-based crypto exchange Coincheck, which led in the theft of 523 million NEM coins worth roughly $534 million, Japan is renowned for stepping up its regulatory efforts.
Since then, Nakajima acknowledges, the nation has become a tough market for registered crypto exchanges to conduct business in. Customers are adequately protected and Anti-Money Laundering standards are met under the existing regulatory framework for crypto exchanges. However, most of the registered crypto exchanges’ economic situations are “very bleak,” according to Nakajima.
Related: Crypto should be included in the US-Japan digital trade agreement, according to an American think tank
To regulate digital currencies, the Japanese government is looking for worldwide collaboration. The Japanese Ministry of Finance is allegedly looking to expand its workforce in this regard. Last month, the FSA created a new section to monitor the wider crypto markets and concentrate on decentralized finance.
Major cryptocurrency exchanges such as Binance and Bybit are not among the 31 crypto exchanges registered in Japan. In May, the FSA sent a formal warning letter to Bybit and Binance, accusing them of operating cryptocurrency exchanges in the nation without being registered.
This article broadly covered the following related topics:
- is cryptocurrency legal
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- crypto exchange