Japan's Financial Services Agency (FSA) has announced plans to tighten cryptocurrency regulations that could impact the market.
Changes in Cryptocurrency Regulation
The FSA plans to shift the regulation of cryptocurrencies from the Payment Services Act to the more stringent Financial Instruments and Exchange Act (FIEA). A report dated September 2 indicated that most issues in the crypto market are similar to those in traditional investments, including unclear whitepapers, fraud, and low investor knowledge. The proposed measures aim to address these issues.
Impact of Cryptocurrency on Japan's Economy
According to the report, cryptocurrencies are rapidly impacting Japan's economy. There are over 12 million accounts at domestic exchanges, with total deposits exceeding 5 trillion yen ($33.7 billion), equating to almost one account for every 10 people. Most traders are small-scale, with over 80% of accounts holding less than $675.
View of Financial Authorities
Japan's Finance Minister, Katsunobu Kato, stated that while crypto is volatile, it can still be part of a diversified investment portfolio if a proper investment environment is established. He also noted that the Finance Ministry aims to create a crypto-friendly atmosphere.
The planned changes to cryptocurrency regulation in Japan may lead to stricter oversight of the sector and increased investor protection, as well as integrate cryptocurrencies into standard investment practices.
