Could the country of Japan oversee the cryptocurrency regulation too heavily?

Could Japan be in excess of regulation of the cryptocurrency space in the country?

Japan is one of the most important countries for virtual currencies. Not only because of the great commercial activity that takes place in the country, but also because there are several companies located there.

Although the cryptocurrency market in Japan is growing and growing in recent years, the country could take too many rules to control it. According to a report published by The Block, when the Japanese finance minister was Nobuchika Mori – who also worked as commissioner Financial services agency (FSA) – the market has grown rapidly.

However, since leaving its position and the government, regulatory agencies have begun to regulate the market with stricter rules. This is clearly something that could not be positive for cryptographic space. Over-regulation is not the answer to the lack of them.

For example, in October, the FSA allowed the market players to self-regulate. Specifically, they received the status of self-regulated entities. Because of Japan has experienced several hacks At several exchanges, a senior FSA official explained that it is necessary to have an appropriate regulatory framework and to guarantee stability in space.

Although the FSA provided an important degree of self-regulation on the market, the organization also imposed a new regulatory framework. The regulatory agency informed that cryptographic portfolios should be regulated in the same way as exchanges. Those portfolios that are not registered will not be able to operate.

Wallets they are the ones who have their private keys. However, it may not be possible for portfolio service providers to manage user payments. A solution requires that the wallets know the customer verification (KYC) and all the information from the users.

It is clear that the government wants to avoid money laundering in the country, but to support the momentum of the local cryptocurrency sector. For example, the government started working side by side with other countries to prevent the use of virtual currencies that focus on privacy as Monero (XMR), Zcash (ZEC) or Dash.

There are several countries that are trying to establish themselves as a crypto and blockchain leader. Some of them are Switzerland, South Korea, Singapore or Malta. This shows that there is a very competitive regulatory landscape around the world. There are countries that want to attract new investments and flexible and clear regulations help nations to grow.

Self Japan begins to impose several new regulations that make it difficult for companies to regulate their operations in the country or start a business, this may not be good for Japan. At the moment there are not the first 10 Exchanges of Japanese cryptocurrencies. At the beginning of the current year, Coincheck's cryptocurrency exchange suffered an attack that resulted in the loss of about $ 500 million of XEM tokens. This may also have played an important role in influencing future policies and regulations in Japan. In fact, after the hack, the government began to evaluate how to improve the ecosystem. To do it, he said it cryptographic exchanges who wants to continue working must have a license to do so.

During the last week, a legislator called Takeshi Fujimaki proposed a simplified procedure for the payment of taxes on virtual currencies. The main intention is to help investors declare their taxes and revitalize the market again.

According to a report by Business Insider, the increase in Bitcoin's value could have added 0.3% to Japanese GDP growth. Analysts of this report work for Nomura and state that the wealth effect generated by this growth in Bitcoin will stimulate consumer spending.

Having a regulatory environment and clear regulations it's something that Japan must do. However, over-regulation of the market is not the solution and could damage the industry rather than help it grow.

As The Block wrote,

"The policies that the Japanese government has proposed in recent months are contradictory: the Japanese market expanded when Nobuchika Mori adopted an open approach to virtual currencies and regulations.If Japan wants to remain an active actor in space, it will have to reevaluate its position legislation and how it wants to protect investors and the entire crypt environment ".