Japan’s Financial Services Agency (FSA) is drafting a more restrictive policy for regulating cryptocurrencies in the country, in a move that looks set to tighten the rules for digital currency sector businesses. According to reports in local media Jiji Press, the rule changes are being brought in with a view to better protect consumers, with the regulator having already begun to solicit views on how the new policy could shape up.
New regulations are expected to be brought in before summer 2022.
New regulations are expected to be brought in before summer next year to provide greater investor protections as quickly as possible. With an eye on continuing to encourage innovation and development, the FSA has said the new rules and regulations would bring much-needed stability to the crypto sector. The new announcement follows the creation of a dedicated panel of experts last month to look at the issues of regulation in decentralized finance, joining other ongoing efforts to address developments in central bank digital currencies and cryptocurrencies more broadly.
Crypto firms in Japan are required to register and adhere to FSA’s compliance requirements.
Japan has been historically progressive towards new tech, even cryptocurrencies and blockchain. Some of the earliest crypto trading platforms and exchanges were founded in Japan, and the country continues to be a regional hub for trading in East Asia. Following the substantial Coincheck hack in 2019, a series of new regulations were brought in to strengthen exchanges’ security and offer investors a better quality of protection against future attacks. As part of the measures, the FSA has required digital currency platforms operating in the country to register and adhere to its compliance requirements.