Japanese financial officials have called on international regulators to regulate cryptocurrency in the same manner they treat banking, advocating for more regulations for the industry. Mamoru Yanase, the deputy director-general of the Strategy Development and Management Bureau of the Financial Services Agency, believes that cryptocurrency has to be regulated.
The statements from Japan’s financial watchdog follow the industry-rattling collapse of FTX in November, which spurred a need for swift regulatory action globally.
He said that the occurrence was unrelated to the presence of cryptocurrencies. Instead, he cautioned that “lax internal controls,” “loose governance,” and inadequate oversight contributed to the company’s significant scandal.
Yanase claimed that the FSA of Japan has also started urging authorities in other nations, such as those in the United States and Europe, to control cryptocurrency exchanges just as rigorously as they would regulate banks. Furthermore, he claimed that Japan has been promoting international crypto regulation through its membership in the International Financial Stability Board.
In the interview, Yanase made the suggestion that foreign regulators should ask cryptocurrency exchanges to take new steps like auditing crypto exchanges to verify proper asset management of client assets. If big businesses collapse, he also proposed a “multi-national resolution mechanism (international cooperation)” to aid victims.
Japan is frequently regarded as a very crypto-friendly nation, despite such calls for regulation. There aren’t many laws that prohibit cryptocurrencies, and businesses that want to work with them are allowed to register as exchanges.
In some ways, the nation is acting even more leniently. Japan has said that it would end its restriction on foreign stablecoins. Through government investments, it also finances the creation of projects relevant to the metaverse and NFT.
However, The number of cryptocurrency businesses operating in Japan is declining. Leading crypto companies like Coinbase and Kraken intend to stop operating in the nation entirely. However, rather than being caused by particular crypto restrictions, that trend is a result of local market conditions.