Japan allows the cryptocurrency industry to self-regulate

Japan’s apex financial regulatory body, Financial Services Agency (FSA), granted a self-regulatory status permitting the Japan Virtual Currency Exchange Association to police the cryptocurrency exchanges and take action against irregularities.

This decision will allow the government to keep a safety check on concerns around money laundering, theft and security of digital assets. It will also bolster the performance and reliability of the exchanges by providing them a clear regulatory framework. It will also help the regulatory body to take instant decisions in safeguarding the interest of the customers which in the case of bureaucracy takes more time.

The government has not approved a single crypto exchange in the country since December 2017 due to a number of thefts. These incidents had put pressure on the Japanese government to regulate cryptocurrency exchanges. With the proposed regulation, FSA has provided a new set of guidelines for entities who wants to register for new exchanges. Close to 160 exchanges have reportedly shown their interest.

Japan became the first country to legalise the cryptocurrency industry last year and it has been leading the way for other countries who want to adopt regulations around this industry. Officials from India’s own securities regulator SEBI had also gone on a study tour to Japan to study the regulations.