How India Can Take a Cue from Japan In Regulating Cryptocurrency?

July 4, 2020      Vandana Malik

It is an undeniable fact that cryptocurrency has made quite an important place in the current financial system across the world. The major reason behind this is an increase in world-wide adoption is because people have started seeing its benefit over fiat currency. Now with the increasing adoption, there is also a need of better regulation and for this matter, various countries across the world are imposing several regulatory measures or making changes in the existing ones for greater adoption.

One of the finest examples of a great crypto regulatory system in Japan. It has been believed that ever since Japan has started considering digital currencies as legal properties, it has developed the most progressive regulatory system for cryptocurrencies across the world. The crypto exchanges in the country are legal and are required to get registered with the Financial Services Agency of the country. There is a complete user-friendly environment in Japan when it comes to crypto regulations.

Increase in Crypto adoption in Japan

Over the past few years, it has been seen that Japan has become a hub for cryptocurrencies. Back in April 2017, the country accepted Bitcoin as a legal payment system. Due to this decision, it has become one of the largest marketplaces for Bitcoin across the world. The major reason behind the huge increase in crypto adoption in Japan is the better crypto regulatory system. In the previous year, it was recorded that the men of age group 25-30 year are showing quite a great interest in cryptocurrencies and around 14% of them own cryptocurrency.

Through this, it is quite clear that there is a huge crypto adoption among the youngsters of the country. As far as the crypto regulations and acceptance are considered, Japan is the leading one among other countries of the world. Due to this, it is quite evident today that Japan has become a hub of cryptocurrency with great adoption. It has also been seen that various companies across the country have also started adopting cryptocurrency including some prominent one as well.

Cryptocurrency regulations in India

With the world-leading towards a huge crypto adoption, India is currently lagging behind and the reason being, the strict rules and regulations which keep people away from investing in crypto. It has been seen that the Indian government has never been in favour of cryptocurrencies. Different financial committees have also warned the citizens of India against cryptocurrencies.

Back in 2017, the Reserve Bank of India (RBI) and the Ministry of Finance cautioned the citizens of India against cryptocurrencies and advised them to stay away from them. Ever since then, there have been several warnings against cryptocurrencies through various press releases. In April 2018, RBI issued a regulation for all the banks of the country that they cannot deal with cryptocurrency and along with this, they cannot even provide any kind of financial assistance to the firms dealing in cryptocurrency.

However, this has to be noted down that cryptocurrency was never banned in India, one was able to deal in them on their own without any assistance from financial institutions or banks. Due to this decision, the crypto exchanges across the country were unable to carry forward their regular operations. However, In March this year, the Supreme Court of India lifted the banking ban imposed by the RBI in 2018. After lifting this ban, the banks were allowed to provide all kinds of financial assistance and advice to crypto firms and exchanges. This has been seen as a positive move which might lead towards a better crypto adoption across the country.

Whether there will be a blanket ban on cryptocurrencies in India?

In July 2019, a government panel from the Indian Ministry of Finance proposed a bill which requires a blanket ban on cryptocurrency across the country. This has led the crypto exchanges and the whole crypto community of India in shock. In that bill, it has been mentioned that any person dealing in cryptocurrency will have to face a jail term of up to 10 years and along with this, there will be a fine of up to $3.2 million which is 25 crore Indian rupees. The same kind of petition was filed by two individuals with the Supreme Court of India, demanding a complete ban on cryptocurrency across the country. However, those petitions are still pending in the Supreme Court and no action has been taken in this regard. It has been seen that any kind of clarification has not been given by any government officials regarding the proposed bill by the Ministry of Finance. However, after lifting up a long imposed ban by RBI, it has been seen that a lot of new startups have appeared in Indian crypto space which is promoting crypto adoption across the country.

Japan will help G20 countries with crypto regulations 

Among all the countries across the world, Japan has the finest crypto regulations for its country. Japan has been called a leader when it comes to crypto acceptance and regulations. The Japanese regulators have created some international rules which are there to prevent money laundering and terrorist finance. Other than this, it also included several measures which should be there to protect the consumer assets and to prevent cyber attacks. With all these rules, Japan is aiming to help all the G20 countries with their crypto regulations which will also increase crypto adoption in those countries. The discussions regarding these international laws were made in the G20 summit which took place in June 2019.

Conclusion 

With this growing digitization and worldwide crypto adoption, there is a high need to amend the crypto regulations in India and one the biggest example is Japan. Just like other parts of the world, cryptocurrency is going to play a major role in the Indian financial system as well. Along with this, it will bring huge opportunities that will help the country as well as its citizen to grow and flourish.

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Vandana Malik
Vandana Malik

Vandana has received Master of Arts degree in English from GEU Dehradun. She is currently working as a content writer with Agio Support Solutions and earlier worked as a sub-news editor at Business News and Information Services Private Limited. She is an enthusiastic content writer and aims to bring a compelling yet informative content to the audience. Meanwhile, enhancing her own knowledge in the cryptocurrency and blockchain industry.