Financial Regulators In Japan Received 190 License Applications From Cryptocurrency Exchanges

According to an unnamed staff member, the Japanese Financial Services Agency (FSA) received up to 190 applications for cryptocurrency exchanges this year alone. Keep in mind that the FSA is the regulatory body in charge of giving the cryptocurrency industry a self-regulatory status. It also certifies the Virtual Currency Exchange Association in Japan to oversees the entire virtual space. The Japanese Virtual Currency Exchange Association will develop policies against money laundering and offer cryptocurrency-related guidelines for exchanges.

Regulation Of The Cryptocurrency Space

One of such a license was granted to Coincheck recently. After Coincheck was hacked in January, the FSA sent it two business improvement orders. The business improvement orders focused mainly on improving operational standards and customer protection. It also had to do with setting more effective anti-money laundering measures.

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In March, the Japanese Financial Services Agency sent seven cryptocurrency exchanges punishment notices. In August, the FSA’s commissioner said that the agency wants to ensure that cryptocurrencies grow under the right regulatory environment. He said that the FSA doesn’t intend to curb the growth in the industry in any way. It only intends to provide some regulatory guidelines.
Over the years, the blockchain and cryptocurrency industry have seen exponential growth in Japan. The FSA has had to become more attentive to the growth of the virtual currency industry by making its services more suitable for fintech-related fields. In July, there was a major overhauling of the agency that made it better equipped to deal with cryptocurrencies.

Because of the overhauling, the Inspection Bureau will be replaced by the strategic Development Bureau. This Bureau will be in charge of developing financial strategies and dealing with issues related to money laundering, fintech and digital currencies. The Coordination Bureau and the Policy and Markets Bureau will be responsible for creating a legal framework to address the rapid development of the FinTech sector.

After successfully introducing regulations that made it a requirement for cryptocurrency exchanges to always report suspicious financial transactions, the National Police Agency in Japan reported a significant increase in cryptocurrency exchange related crimes. The reports showed that there were over 5,944 cases reported between January 2018 and October 2018.

The Japanese government has always taken a liberal stance on cryptocurrencies. They recognize that a blockchain technology is going to be at the center of the fourth industrial revolution. While still at its early stages, countries like Japan are already unlocking the potential of blockchain technology. It is the country’s cryptocurrency friendly environment that has propelled the creation and licensing of so many Japan-based cryptocurrency exchanges.


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