Japan’s top regulatory agency is looking to impose tougher rules on the volatile cryptocurrency industry.
The idea is to subject this market to regulations similar to those used in banking and traditional finance (TradFi).
FSA official blames poor regulation for cryptocurrency scandals
According to a report by Bloomberg, Mamoru Yanase, deputy director general of the Office of Strategy Development and Management at the Financial Services Agency, has urged regulators around the world to implement stronger regulations in the crypto sector. Janas said in an interview:
“If you want to carry out effective regulation, you must do so in the same way as you regulate and supervise traditional institutions.”
Supposedly, the cryptocurrency industry scandals were caused by lax regulations and poor governance, rather than the cryptocurrency itself.
The FSA’s efforts to encourage other regulators in the US, Europe and the rest of the world to implement consistent regulations are being supported by the Financial Stability Board. It is an international organization dedicated to improving the financial system that works on global regulation of activities involving crypto assets.
Japanese encryption policies
Land of the Rising Sun’s crypto policies have successfully protected local investors from FTX. The brokerage firm is currently going through bankruptcy proceedings, with investors and clients worried about the fate of their investments. However, Japanese investors should already have access to the funds that were in the custody of the local FTX unit next month.
Yanas suggested that multinational decision mechanisms could coordinate efforts in the event of another major cryptocurrency crash. The regulator wants countries to require cryptocurrency exchanges to improve aspects such as governance, auditing, and transparency, among others.
Japan’s cryptocurrency policies have been relatively liberal in the face of a harsh crypto winter that has discouraged other Asian countries like Singapore from reconsidering their stances in the sector. The country has made efforts to provide regulatory clarity, which includes a recent update to rules for taxing transactions involving NFTs.
Translated from AMBCRrypto