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The regulator of Japan, the financial services agency, has published a draft of the new regulatory framework on domestic cryptocurrencies. This comes the day after Hong Kong has proposed new stricter rules to curb the risks associated with digital currencies such as money laundering.
Proposal for a financial services agency (FSA)
Cryptocurrency regulations
The draft of the proposed cryptocurrency regulations was published at the end of last week and its main objective is to minimize risks and ensure that all parties involved get good value for money. The new framework will monitor and regulate initial currency bids that are conducted in Japan and cryptographic services.
The report was compiled by a study group created by the agency last month to examine the strengths and weaknesses of the cryptocurrency market in Japan. The report contains several recommendations from previous sessions held by the group.
As the main financial regulator in Japan, the FSA is required to submit invoices and remains accountable to the country's parliament. Another role of the agency is to oversee all financial activities carried out in the country. For example, all companies seeking to offer investment services and assets are required to apply and obtain the necessary accreditation from the agency before starting to make the services.
Most of the experts who read the report are of the idea that shows the definitive position of the Japanese government on cryptocurrencies and blockchain technology. Most of the developed countries that have shown tremendous interest in technology have yet to find such a structure.
One of the highlights of the
points out that the report of the financial services agency recognizes it
Technological innovation is not static. The agency is also aware of the
importance of working cordially with other regulatory bodies that are
authorized. It also makes an additional effort to encourage contributors to join the
self-regulatory affiliation.
According to the report, the involvement of qualified employees in the decision-making process will ensure that the new rules do not paralyze the sector. Their contribution to the process will also improve its ability to regulate financial services.
It will be recalled that in October the agency accredited Japan Digital Foreign Money. The main objective of this decision was to implement self-regulation laws within the framework of primary legal regulations. Accreditation has provided Japan Digital Foreign Money with the means to create specific guidelines for exchanges of national cryptocurrencies. The guidelines include measures to combat insider trading and money laundering.
Restrictions on derivative transactions,
Lists of privacy coins and margin trading
The financial services agency has also proposed severe restrictions on derivatives transactions, margin transactions and private coin listings. Regarding the initial regulation of money supply, the agency states that specific tokens can be considered subject to rules based on their structure. ICOs will also be subject to the Financial Instruments and Exchange Act.
On the issue of alleged retailers, the report recommends some regulatory measures. It establishes that dealers should have the permission or ability to increase their coin portfolio until registration and obtain the necessary accreditation documents. In addition, alleged retailers will not be allowed to market their services or acquire new customers until they are duly registered.
