A new batch of cryptocurrency regulations is on the way in Japan – Japan’s top financial and cryptocurrency regulator has proposed legal amendments to payments-related legislation.
The proposals were made by the Financial Services Authority (FSA), which proposed changes to two existing laws as part of "creating a stable and efficient settlement system" in the age of digital finance.
CoinPost reported that the regulations mentioned issues related to Stablecoins, as well as “new protocols designed to increase the effectiveness of Stablecoins.” [crypto] Transaction monitoring for banks and other financial institutions.
The FSA explained that some Stablecoins and Stablecoin offerings lack adequate user protections, although a comprehensive proposal to regulate these assets may come at a later date.
It also proposes to create a "registration system" for brokers and intermediaries that offer to buy, sell, and manage services for cryptocurrencies and other "electronic payment methods."
Like cryptocurrency exchanges, brokers are obliged to submit regular reports to regulators. The latter will also have the power to issue document submission orders, conduct on-site inspections, issue business improvement orders, and even liquidate businesses that are not compliant or up to standard.
However, the package of measures is not only based on compliance. The FSA has spoken of promoting the nation’s blockchain and cryptocurrency industry, and will seek to add a legally binding definition of “cryptocurrency asset” to the bill’s definition of “electronic means of payment.”
The measures also aim to improve the effectiveness of transaction monitoring by establishing an overseas cryptocurrency exchange platform to cooperate with domestic exchanges on anti-money laundering (AML) measures involving the banking industry.
The FSA hopes to cultivate a network of exchange-traded analysts who work together to analyze suspicious transactions in the foreign exchange and cryptocurrency markets.
Further measures are proposed to identify suspicious prepayment transactions - for account top-ups and gift card purchases that may be at risk of AML violations.
The government will need to sign off on the amendment, which also needs to be ratified in Parliament. So far, however, all of the FSA's previous legislation-related requests have been granted -- and likely bundled with other uncontested legal amendments. As such, they could be written into law in the coming weeks and possibly enacted later this year.
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