The Financial Services Agency (FSA), Japan’s top financial regulator, has expressed its desire to implement stricter and more detailed policies for the country’s crypto industry. FSA said that with tighter policies, the government can better protect its Japanese investors’ funds.
Last July, the regulator created a special panel of financial experts to help the government closely monitor the growing decentralized finance in the country.
Another major responsibility of the newly created agency is to keep track of the developments in both cryptocurrencies and central bank digital currencies.
Regulation replacement
FSA has announced its plans to replace and implement new cryptocurrency regulations by mid-2022, and the regulator hopes that these new policies will create stability in the country’s crypto market.
It also added that while these new regulations are stricter than before, they are designed to protect Japanese investors while maintaining the steady growth of the crypto industry.
Previous revision
The FSA had also made a revision last 2019 when it required crypto exchanges to impose new features that would add another layer of security for investors’ assets.
The FSA was forced to make an immediate revision on the existing law back then because of the $32 million Bitpoint hacking incident, which revealed significant weaknesses in Japanese crypto laws.
On top of that, the recent Liquid crypto exchange hacking incident has also convinced the government that the country’s cryptocurrency laws need to be strengthened even further.
The government is planning to tighten its anti-money laundering laws and price volatility measures to prevent massive hacking incidents from happening in the future.
Also, FSA revealed that it is set to adopt the Financial Action Task Force’s (FATF) Travel Rule by 2022. With the adoption of this rule, the government will require all service providers that are involved in cryptocurrencies to share transaction data.
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