Japan is currently working hard on a legal regulation for cryptocurrencies: The Japanese crypto exchange association JCVEA is working on a green list that should help to simplify the procedure for approving new cryptocurrencies. On the other hand, the government is tightening laws for crypto exchanges to enforce sanctions against Russia.
The procedure for approving new cryptocurrencies is to be simplified in order to increase the number of currencies traded in the country. Japan fears being left behind by the rest of the world and wants to catch up again. The JVCEA (Japan Virtual and Crypto Assets Exchange Association) represents a group of 31 exchanges and plans to publish a list of 18 cryptocurrencies in circulation.
Unlike before, currencies on the green list do not have to go through the association’s vetting process to list a currency. This is to make up ground: There are only 40 cryptocurrencies listed on Japanese exchanges – Coinbase counted their 139 at year-end 2021. Also, the equivalent of $9.8 billion in cryptocurrencies held by users on Japanese exchanges in January bears no relation to the $278 billion Coinbase recorded in December.
BTC, ETH, LTC on green list
Popular and widespread cryptocurrencies such as Bitcoin, Ethereum and Litecoin are to make it onto the green list. The condition for a list entry is a listing of the currency on three or more exchanges for at least six months.
Genki Oda, a vice-chairman of the JVCEA, analyses the Japanese dilemma: “Only a handful of crypto exchanges are profitable because it took so long for cryptocurrencies to be approved. Users also flocked to foreign exchanges.” With this in mind, it seems only logical that the JVCEA should now be given more resources to approve new cryptocurrencies, as well as coin and initial exchange offerings.
Japan gets serious about crypto regulation
Regulation of the crypto market’s proliferation has been on Japan’s agenda since last year. The Reuters news agency reported in July that Japan would step up its diplomatic efforts to regulate digital currencies worldwide.
The rapidly advancing developments triggered the urge in Japan to implement stronger supervision. That is why a separate department within the Japanese Financial Supervisory Authority (FSA) was established at the beginning of July 2021 to deal significantly with the regulation of the crypto market and its applications.
Russia as a catalyst
Laws for crypto exchanges are now also being tightened because of sanctions against Russia, as Hirokazu Matsuno, the head of Japan’s Cabinet Secretariat, explained at a recent conference.
Cointelegraph reports that to this end, the laws for international financial trading are to be adjusted so that crypto exchanges will also be obliged to verify and report transactions with Russian private individuals or companies. This will put the crypto sector on a regulatory par with banks, which is likely to severely limit the scope for natural and legal Russian persons.