The Financial Services Agency (FSA), the financial regulator of Japan, has started discussions around imposing stricter regulations on cryptocurrencies in an effort to improve investor projection. As revealed, the updated regulations will be designed to provide better protection to Japanese cryptocurrency investors.
The FSA established a motivated section back in the month of July along with a panel of financial experts to assist the government to oversee digital and decentralized finance.
It should be noted that the agency will also be responsible for keeping track of developments in Central Bank Digital Currencies (CBDCs) and cryptocurrencies initiatives.
By mid-2022, it is expected that the financial regulator will replace and impose new crypto regulations and with that, the FSA hopes to bring stability to the crypto market while ensuring no damage to the development and innovation within the ecosystem.
In addition to this, it should be noted that the FSA had revised a similar law in the year 2019, which had productively mandated crypto exchanges within Japan to implement new features for safeguarding the assets of the users.
The FSA further believes that operators within the country are yet to implement sufficient Anti-Money Laundering and price volatility measures.
Earlier this month, the FSA made an announcement that it is going to adopt the Travel Rule of FATF by 2022, which will require all the service providers dealing in cryptocurrencies to share the transaction data.
The Travel Rule was introduced back in the year 2019 as a preventive measure against money laundering and terrorist financing with cryptocurrencies.
Along with this, it should be noted that the drive is going to be supported by the Japanese Virtual Currency Exchange Association in order to establish a necessary system to precisely implement that travel rule.