Recently, the Financial Services Agency (FSA) of Japan published a draft which contains the new framework for addressing cryptocurrencies and ICOs in the country.
The FSA is responsible for the maintenance of a stable financial structure in Japan. It oversees banks, exchanges, and insurance sectors and provides support through audits and operating procedure legislations.
The report in question is the Japan’s move in the game of cryptocurrency accommodation. The definitive stance by Japan in this report is matched by very few countries on the globe.
This report was based on a study by a research group on the problems related to virtual currency. The report was detailed and has clear and covers all topics intended.
The report also mentions that the dynamics of the field under study are continuously varying.
‘The increase in the types of virtual currencies and the rapid expansion of the business scale are progressing.. The reality that maintenance of momentum has not kept up has become clear‘
‘It is a difficult aspect to build a system that responds to every situation by procuring pretense’
The report then proceeds to make suggestions in light of the studies made.
For example, in the case of ICO, the report notes that ICO’s has a much expansive level of design freedom and depending on the structure, it may or may not be subject to regulations under the FSA.
‘Depending on the structure of the company, it may be subject to regulation by the Financial Instruments and Exchange Law or the Fund Settlement Act’
In case of companies and exchanges that are actively trading while the regulation formulation is in progress, the report dubs them as ‘deemed dealers’ and has prohibited them from using advertisement for gain of new customers or new assets to be handled or else, the company will be abolished. The report also prolonged the time for business for these ‘deemed’ dealers.
The report concludes with a joint assurance that the study group will keep observing the proceedings of virtual currency and will interfere where necessary.
‘For administrative and industry stakeholders, we will continue to optimize the virtual currency exchange industry etc’
In August, the head of Japan’s financial regulator FSA Toshihide Endo told Reuters:
“We have no intention to curb excessively. We would like to see it grow under appropriate regulation.”
This report is the physical manifestation of this stop-when-necessary approach.
