Japan is focused on introducing crypto regulations as the Financial Services Agency (FSA) has recently established a new unit to oversee digital currency regulatory frameworks, while the Ministry of Finance is considering increasing its headcount.
Citing three anonymous officials, Reuters reported on Friday that the move on the part of the Japanese agency and the Ministry came as the country is becoming concerned over the influence of private money on the existing financial system.
“Japan can no longer leave things unattended with global developments over digital currencies moving so rapidly,” one of the officials told the publication.
Japan is also considering deepening its diplomatic dialogs with other global economic giants in regulating the booming crypto industry.
Stablecoins Are the Real Threat
Japanese regulators are particularly concerned over the impact of the so-called stablecoins, which are pegged to the fiats or other assets and issued privately. Though usage of stablecoins is now limited to trading cryptocurrencies, Facebook’s attempt to launch Diem (previously Libra) caught regulatory attention worldwide.
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Similar to other top monetary regulators, the Bank of Japan is working on a central bank digital currency (CBDC), and the proposed regulations on the crypto industry will only complement that move.
The new unit of the FSA, which was launched on July 8, is anticipated to oversee the ‘decentralized finance’ platforms, which is the industry that is being seen as the real disruptor of the traditional finance sector.
Though the FSA confirmed the establishment of the new crypto-focused division, it did not elaborate on its scope.
Furthermore, several other countries have ramped up their efforts to regulate the cryptocurrency industry. South Africa, which has seen a couple of high-profile cryptocurrency scams recently, is considering regulating the wild industry.