- Japan is urging global regulators to treat crypto with the same rigor as they do banks.
- Mamoru Yanase, FSA’s Deputy Director General, believes crypto should be regulated.
- Yanese proposed US, EU regulators to introduce new restrictions for crypto exchanges.
Following the collapse of Sam Bankman-Fried’s FTX digital-asset exchange, Japan is calling on global regulators to treat cryptocurrencies with the same rigor as they do banks. Mamoru Yanase, the Deputy Director General of the Financial Services Agency’s (FSA) Strategy Development and Management Bureau, believes that the crypto sector needs to be controlled.
Speaking on the matter in an interview, Yanase stated,
Crypto has become this big, if you like to implement effective regulation, you have to do the same as you regulate and supervise traditional institutions.
Furthermore, Yanase discussed FTX’s crash. He argued that the situation was not brought about by the existence of crypto alone. Instead, he cautioned that “lax internal controls,” “loose governance,” and inadequate supervision contributed to the FTX’s massive scandal.
Yanase claimed that Japan’s FSA has started urging regulators in other countries, including the US and EU, to regulate crypto exchanges just as rigorously as they would regulate banks. He further stated that Japan has been advocating for global crypto regulation through its position on the International Financial Stability Board.
In the interview, Yanase opined that foreign regulators might demand new restrictions from crypto exchanges. On-site inspections to ensure companies are properly managing client assets could be one of the measures. In addition, he proposed a “multi-national resolution mechanism” to assist nations to work together if big companies fail.
Despite such calls for regulation, Japan is frequently regarded as a relatively crypto-friendly country. There aren’t many laws against digital assets, and companies who want to work with them are allowed to register as exchanges.
In certain aspects, the nation is acting even more leniently. Japan recently announced plans to relax restrictions on foreign stablecoins. Additionally, various metaverse and NFT projects are being developed through government investments.
Contrastingly, some crypto companies are limiting their presence in Japan. Both Kraken and Coinbase intend to cease or significantly scale back their operations in the region. However, this trend seems to be the result of local market conditions rather than crypto-specific restrictions.
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Source: https://coinedition.com/regulate-crypto-like-banks-japans-financial-services-agency/