According to a recent report, Japan's stern approach and strict regulations are not helping the cause of foreign exchanges in the country. However, it seems in the long run; new players would benefit a great deal from it.
Commissioning a research team at So and Sato law, double jump, Tokyo, the developer of the game crypto heroes, conducted a study on digital assets in Japan. The comprehensive report covered digital assets such as tokens and crypto derivatives in Japan was released on March 31.
Joerg Schmidt and So Saito in an interview has stated that Japan's regulations come down pretty heavily on cryptocurrency exchanges than most countries. However, they note this is a sign of good things to come as it would ultimately lead to transitional finances to join in.
He noted that given the fact that the market is so regulated in Japan, it might give it an illusion of overkill at the initial glance. However, with time it will help the market to mature eventually. He believes in order to increase their stake in the digital asset space; many institutional players are likely to take a leap.
The regulations in Japan fall under the Payment Services Act and the Financial Instruments and Exchange Act (FIEA). They have been amended, and from April 1 onwards, the changes would come into play.
The 23 exchanges which come under FSA, and all are local ones, none of the big foreign guns has been able to make their way into the Japanese market yet. Although Okcoin obtained a license, it is still to start operating. So Saito explained why the regulations do not encourage the foreign exchanges by stating :
"Some Chinese exchanges purchased Japanese licenses for exchanges, so it's open for foreign exchanges to have licenses in Japan. But under regulations, if foreign crypto exchanges themselves get Japanese licenses, they need to have similar licenses in their countries under the current regulations. There are not so many similar exchanges in foreign countries."
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