The updated Japanese cryptocurrency regulations will take effect starting May 1. The Payments Services Act and the Financial Instruments and Exchange Act (FIEA) that were passed into laws by the House of Representatives in Japan last year to regulate cryptocurrencies were originally planned to take effect starting April. However, due to unavoidable circumstances, the enforcement date was rescheduled last week.

Through the April 3 edition of the <a href="https://kanpou.npb.go.jp/20200403/20200403g00070/20200403g000700003f.html">official government newsletter</a>, the Japanese government revealed that the  PSA and FIEA were reviewed and were set to be implemented beginning next month.
<h2>Updates in the Japanese Payment Services Act</h2>
Since Japan does not have any existing official<a href="https://www.cryptoknowmics.com/crypto/cryptocurrency-regulations-and-its-impact-around-the-globe/"> digital currency laws</a>, amending the already in place payment services laws is the only available option for cryptocurrencies to obtain legal status. Due to this, amendments on the PSA range from altering fundamental wording like “virtual currency” from  “crypto-asset”; to reinforcing regulations on <a href="https://www.cryptoknowmics.com/crypto/guide-for-cryptocurrency-trading-for-beginners-in-2020/">digital currency</a> custodians.

Additionally, the exchange firms in Japan will begin managing clients’ funds separately from their own funds starting next month. This means exchanges will have to partner with a third party entity to keep custody of their client's funds using cold storage services.

However, if the clients insist on hot storage of their funds; exchanges should ensure they hold a similar amount of client funds in crypto assets to reimburse them in case of theft. This requirement was installed in reaction to the  Mt. Gox attack that led to the loss of 850,000 BTC.
<h2>Updates on the Financial Instruments and Exchange Act </h2>
The reviews made to the FIEA include a notion behind electronically recorded transferable rights (ERTRs); to explain that ICOs and STOs will be regulated under this act. ERTRs are the tokens that are issued with the aim to earn profits, security tokens.

Furthermore, crypto derivatives are not subject to any Japanese cryptocurrency regulations despite being 80% of the total trades. Nevertheless, beginning May 1st crypto derivatives will be regulated under the  FIEA.

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Updated Japanese Cryptocurrency Regulations to Take effect starting May

The updated Japanese cryptocurrency regulations will take effect starting May 1. The Payments Services Act and the Financial Instruments and.....

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Updated Japanese Cryptocurrency Regulations to Take effect starting May

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