Japan Will Standardize & Monitor Bitcoin Exchange As Per New Bill
Japan recently felt the need to regulate the exchange and distribution of Bitcoins. As a result, The Diet passed a bill which makes Bitcoin and Virtual currency exchange by the Financial Services Agency (FSA) mandatory. The Diet is a form of Legislature comprising of Lower Houses and Upper Houses in Japan.
The bill will essentially regulate operators responsible for the exchange of virtual currencies. The bill fundamentally keeps virtual currencies and fiat money on the same level and regards them as having the same functions. Virtual Currency Exchange Operators will be required to register themselves at the Japanese Financial Services Agency. FSA will be reserved the right to inspect sites. Operators will compulsorily have to follow the Know-Your-Customer (KYC) practices.
Bitcoins will have ‘Asset’ tags associated with them. Bitcoins and related virtual currencies will be granted asset-like value. They will possess the following properties:
- Legal permission to be used for making payments.
- Digital Transfer permissibility.
Japan embraced Bitcoin after the fall of Mt. Gox. Two years prior, Mt. Gox emerged in Japan as the largest virtual currency exchange in the entire world. However, it eventually imploded. As such, Japan has attempted to foster bitcoin usage and Blockchain development through the passing of this bill. Towards the second half of April, Japan formed its very first Blockchain Industry Organization which included 34 major companies like Microsoft Japan. Post this development, Japan went on to pass the bill.
Previously, the Fund Settlement Law of Japan did not equate Bitcoins and similar Digital Currencies to conventional Currencies. The most opportune time for a revision to the Fund Settlement Law arrived in February 2016, according to the FSA. The Cabinet of Japan finally passed the bill in March. The bill passed is a legislative revision to the Fund Settlement law of Japan. The bill has also brought about changes to other laws like the Payment Service Act and the Banking Act.
This law change has received welcome with open arms by the Digital Currency Industry. Government Regulation for the virtual currency industry in Japan have left start-ups heaving a huge sigh of relief. This bill is going to prove most beneficial to bitcoin start-ups that have sprung up recently in Japan, according to CNN. An executive from a leading bitcoin exchange in Tokyo has called this move as ‘epoch-making’. BitFlyer is a Tokyo Japanese Exchange which recently raised $27 million in a funding spree. The funding raised is larger than that raised by any bitcoin or Fintech company in Japan. CEO of bitFlyer stated that the regulations put into action will raise the trust of people in virtual currency. The new rules are set to further promote and bring about immense growth in this industry. This government regulation will make way for bigger and legacy companies to sit back and take notice of cryptocurrency, the bitcoin space and industry.