Could Japanese regulatory change give new boost to crypto?
Regulations governing crypto could be set for a change – with the sector’s governing body preparing to reform laws governing stablecoins and security tokens. Trust banks can also be empowered to handle crypto, as is already the case in the US.
According to the Japanese media CoinPost Finance Agency (the nation’s top financial regulator) has issued a new set of financial management guidelines. The document mentions several crypto-related matters.
The new recommendations speak about crypto in a much more positive tone than has been the case recently. The agency claims that to help usher in a “digital society,” it will “promote the development of an environment” where “digital money and cryptocurrency” can thrive “to promote the development of Web3 and the metaverse from a financial perspective.”
The agency wants to classify stablecoins into two legally recognized categories – namely “digital money-like” coins and “cryptoasset-like” tokens.
The first category, the agency wrote, will refer to tokens issued by banks and similar companies.
In addition, the agency wants to streamline the system that self-regulatory bodies use when screening coins for listing on crypto exchanges and “develop a system” that allows trust banks to perform crypto custody operations.
Furthermore, the agency wrote about the need to create a “private trading system” for security tokens – with many Japanese firms eager to launch trading platforms for these coins.
Regulatory Change – Could It Trigger Crypto Growth in Japan?
The changes come as the Japanese government swings towards an industry-friendly stance. As previously reported, Prime Minister Fumio Kishida has spoken glowingly about Web3, the metaverse and non-fungible tokens (NFTs), all of which he believes have the power to stimulate the Japanese economy.
Kishida has also spoken about his intention to reform the laws governing the way crypto is taxed in Japan – especially when it comes to companies that issue crypto assets.
Critics have argued that there is currently a brain drain (and capital) in the Japanese crypto sector, with many firms looking to relocate overseas to less strictly regulated nations. Kishida prefers to turn this around. Historically, the government has been active in the technology sector, which it has heavily subsidized in many cases.
With rules governing the selection of tokens listed on crypto exchanges now also being relaxed, the stage may well be set for a Japanese crypto revival.
