International rules of virtual currency
Mamoru Yanase, a counselor at the Financial Services Agency’s Policy Bureau, said that there is a need for uniform international rules that impose the same level of strict regulations on crypto asset (virtual currency) exchanges as banks and securities companies. Bloomberg, which interviewed Mr. Yanase, reported on the 17th.
It is said that Japan’s thinking has already begun to be conveyed at forums such as the Financial Stability Board (FSB) and the Financial Action Task Force (FATF). In addition, following the FTX bankruptcy, he said that he would insist on this idea when he consults with global regulators.
What is FATF
An abbreviation of “Financial Action Task Force”, it is an international organization that oversees anti-money laundering (AML) and countering the financing of terrorism (CFT). Although the rules and recommendations it presents are not legally binding, they carry out examinations of member countries and publish a list of non-cooperating countries in AML and CFT, so they have a great influence.
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Mr. Yanase said that the following points are necessary for regulation of virtual currencies, and pointed out that on-site inspections and monitoring are also necessary. He said that Japan also intends to comply with international rules.
- User protection
- Anti-money laundering
- Exchanger Governance (Corporate Governance)
In addition, the FSA explained that it does not intend to spread virtual currency as a means of asset building for individual investors. On the other hand, he said he has certain expectations for blockchain-based technology.
Regulatory development by the Financial Services Agency
The Financial Services Agency has long shown a willingness to cooperate with foreign countries on cryptocurrency regulations. In a speech given by Deputy Director-General for International Affairs Amaya last November, he said that Japan would actively contribute to policy discussions and international cooperation with other countries.
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Even now, the Financial Services Agency is working to improve the Web3 environment and create regulatory rules. Last month, it was reported that the Financial Services Agency will lift the ban on domestic distribution of stablecoins issued overseas in 2023.
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Regarding stablecoins issued overseas, it is proposed that the distributors handling the target issues in Japan, not the issuers, be required to protect the assets, and that the upper limit of remittances will be limited to 1 million yen per transaction.
In addition, for domestically issued stablecoins, the issuer is obliged to prepare collateral assets as collateral, and issuance is limited to banks, fund transfer companies, trust companies, etc.
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