Recent evidence shows that strict laws and crypto rules in Japan are preventing forex trading from doing business in Japan. DoubleJump.Tokyo, a game developer, set up the research team So & Sato to find out and report on Japan’s crypto assets.
A report released on March 31 looked at the regulatory treatment of various digital assets, analyzed their primary and secondary markets, and provided an overview of various players in the industry, from exchanges to liquidity providers to custodians. Cryptocurrencies and Tokens in Japan.
An interview with Jörg Schmidt and So Saito showed that the crypto rules in Japan for trading digital assets are much stricter in Japan than in any other country. Fortunately, the rules are beneficial in the long run as they support traditional forms of funding.
The market for digital assets in Japan is overregulated and at first glance looks like an overkill. In the future, however, Japan’s crypto rules will move to market maturity as more market participants stand ready to enter the market and increase the volume of crypto assets.
Crypto Regulations in Japan effective April 1st
The regulatory authorities in Japan are subject to the Payment Service Act (PSA) and the Financial Instruments and Exchange Act (FIEA). The strict regulations of these bodies are expected to come into force on April 1, 2020.
PSA’s regulations mandate that the digital asset exchange must employ third-party stakeholders to hold the trader’s money and segregate the funds from their cash flow.
The FIEA has faced constant struggles to regulate the Japanese digital asset derivatives market, which accounts for 90 percent of its total volume.
According to the crypto regulations in Japan, exchanges for digital currencies must obtain an operating license through the Japanese Financial Services Agency.
The clause in the crypto regulations in Japan states that when registering as a digital currency exchange in Japan, there are some checkpoints to be observed overall. Japan’s local businesses should be incorporated into a public company and have at least 10 million Japanese yen capital.
Benefit from investors in the long term
An exchange must therefore ensure that its assets do not fall below the number of customer funds held in its wallets. There are currently 23 officially regulated FSA locations, none of which are operated from abroad. These crypto rules in Japan are a hurdle for foreign investors.
Recently, some Chinese investors have bought Japanese licenses to set up exchanges as it is open for foreign exchanges to obtain licenses in Japan. However, Japan reiterates that investors should have similar licenses from regulators in their own countries as stipulated in applicable regulations.
Only companies with strict regulations from their host countries could obtain licenses to trade in Japan. An example would be the United States.
To the extent that Japan’s crypto rules are unfavorable for trading, research shows that the best time to enter the Japanese market is now, as the measures will make Japan a huge safe haven for crypto assets.