Late last month the Financial Services Agency in Japan made the announcement that they would be issuing no fewer than 11 operating licences to various bitcoin exchanges. Japan has long been viewed as a champion of cryptocurrencies, and with prices of bitcoins at an all time high, the FSA’s announcement has been welcomed by many who up until now have been concerned by the lack of security surrounding bitcoin exchanges.
Payment services law
In an attempt to make coin exchanges more secure, the FSA of Japan made an amendment to the payment services law back in April. The amendment stated that cryptocurrency exchanges were required to register with authorities by the end of September. The law also established bitcoins as a legal form of payment and enforced several operational requirements for bitcoin exchanges. The requirements include everything from proper segregation of customers’ accounts, to the verification of customer identities and extremely high standards when it comes to cyber security.
More to follow
As it stands, there are 17 further applications in review, and 12 exchanges have decided to close up shop because of the new regulations. A press release from Quoine, one of the exchanges to receive a licence from the FSA, stated that they were happy to work alongside the regulator towards a “healthy development of the cryptocurrency industry.”
When it comes to cryptocurrency regulations, Japan has always been on the front foot and is considered one of the most proactive countries in the world. With the licences being issued against a backdrop of regulatory shifts in the world of cryptocurrency, Japan has stood apart from China, which has banned initial coin offerings (ICOs). The ban saw several exchanges in China state that they intend to cease trading domestically. As of yet, no such ban exists in Japan, but there are suggestions that one could be on the way.