Japan continues to work on improving the legal regulation of the cryptocurrency sphere. The main character here again the Japanese financial services Agency (FSA). This time, according to reports in Japanese newspaper Sankei, the Agency decided to change the legal framework for regulating digital currencies.
To date legal definitions and legal standards for the cryptocurrencies described in the Act on payment systems (PSA). Amendments were adopted in 2016. According to them bitcoin and other digital currency defined as legal tender that can be used to pay for various goods and services and is transmitted through electronic data processing. As a result, it is subject to purchase tax. Now the FSA has decided to transfer the legal regulation of cryptocurrency Law on the financial instruments and exchange (FIEA). As explained by Sankei, this legal act will provide stronger consumer protection because it will require companies operating with securities, to manage the client’s funds separately from corporate assets.
Also FIEA will change the status of digital currencies. If the FSA proposal is accepted, cryptocurrencies will be classified as a financial product, not a means of payment. Among the financial products are usually classified as stocks, futures, mutual funds, and so on. Such a legal definition will open up opportunities for distribution of derivatives of crypto currencies, and therefore exchange-traded funds (ETFs) that focus on the digital currency.
We will remind that active work of Japanese regulators began a after hacking one of the largest kryptomere Japan’s Coincheck at the beginning of the current year. Then it was stolen about 530 million token HEM (NEM), which was equivalent to $400 million. thereafter, the FSA began to conduct checks cryptocurrency exchanges and found many different flaws, creating gaps in the security system. Therefore, in June, the Agency prepared new rules and ordered to provide as of July 23, reporting for work on improving the systems.
Also in early June, Japanese self-regulating body, the Association of crypto-currency exchanges (JVCEA) said that developing its own voluntary rules. They focus on improving existing measures to combat money-laundering (AML) and prevent trade in anonymous cryptocurrency, like Monero and zcash for. However in April the FSA had also asked the stock exchanges to withdraw the assets.
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