- The Financial Services Agency of Japan wants crypto to be regulated like banks.
- The country’s crypto policy has helped local FTX investors to access their funds.
Japan’s top regulator is looking to impose stricter rules on the volatile crypto industry. The idea is to subject the crypto industry to regulations similar to those used for banking and traditional finance (TradFi).
FSA official blames lax regulation for crypto scandals
According to a report published by Bloomberg, the deputy director-general of the Financial Services Agency’s Strategy Development and Management Bureau, Mamoru Yanase, has urged regulators around the globe to implement tougher regulations on the crypto sector.
In an interview, Yanase said:
“If you like to implement effective regulation, you have to do the same as you regulate and supervise traditional institutions.”
Reportedly, the scandals in this industry result from lax regulations and loose governance, rather than crypto itself.
The Financial Services Agency’s efforts to encourage its counterparts in the U.S., Europe, and elsewhere, to implement consistent regulations, are being streamlined through the Financial Stability Board. This is an international organization working on the global regulation of crypto asset activities.
The crypto policy of Japan
The island nation’s crypto policy has been successful in protecting local investors of the Bahamas crypto exchange FTX. The exchange is currently undergoing bankruptcy proceedings, with investors and customers anxious about the fate of their investments. However, the Japanese investors are set to access their funds from FTX’s local arm next month.
FSA’s Yanase indicated that multi-national resolution mechanisms may coordinate efforts in the event of another high-profile crypto failure. The official wants countries to demand that the crypto exchanges step up their governance, auditing and disclosure, among other things.
Japan’s crypto policy has been arguably liberal in the face of a brutal crypto winter that has discouraged other Asian countries like Singapore to reconsider their stance on crypto. The country has made efforts to provide regulatory clarity, which includes a recent update on the taxation rules for NFT transactions.