Could a Change in Japanese Regulation Give Crypto a New Boost?

The industry's regulatory authority is prepared to amend the legislation governing stablecoins and security tokens, which could lead to a change in the regulations controlling cryptocurrencies. Additionally, as is already the case in the United States, trust banks may be given authority to manage cryptocurrency.

The Financial Services Agency, the country's primary financial regulator, has unveiled a fresh set of financial administration policy proposals, according to the Japanese news source CoinPost. The text includes numerous references to topics relating to cryptocurrency.

The new suggestions are substantially more supportive of cryptocurrency than previous ones have been. The organization asserts that in order to "promote the development of an environment" where "digital money and cryptocurrency" can flourish, it will help usher in a "digital society." This is done, according to the agency, "in order to promote the development of Web3 and the metaverse from a financial perspective."

Stablecoins will be categorized by the agency into "digital money-like" coins and "cryptoasset-like" tokens, two legally recognized categories.

The agency stated that the first category would apply to tokens issued by banks and other similar businesses.

Additionally, the agency aims to "create a framework" that permits trust institutions to carry out crypto custody operations and improve the process self-regulatory bodies use to test currencies before putting them on cryptocurrency exchanges.

The agency also mentioned the requirement for developing a "private trading system" for security tokens, as many Japanese companies are ready to introduce trading platforms for these coins.

Regulatory Change: A Potential Growth Driver for Crypto in Japan?
The adjustments coincide with the Japanese government's shift to a pro-industry position. Prime Minister Fumio Kishida has praised Web3, the metaverse, and non-fungible tokens (NFTs), all of which he believes have the potential to boost the Japanese economy, as was previously reported.

Kishida has also expressed his desire to change the legislation controlling how cryptocurrency is taxed in Japan, particularly as it pertains to businesses that issue cryptoassets.

According to detractors, the Japanese crypto industry is currently experiencing a brain (and cash) drain as many businesses seek to relocate to countries with laxer regulations. Kishida would rather have it go the other way. The government has historically been involved in the tech industry, which it has frequently significantly sponsored.

There may be a chance for a Japanese cryptocurrency resurgence as regulations controlling the types of tokens that can be published on exchanges have just been loosened.