While cryptocurrency is having big waves in the nooks and crannies of the world, governments across the world have taken different actions on digital currency.
To some, creating a template that is favourable to both the lovers of digital currencies is germane, however, in some countries, crypto regulations have taken a hostile direction resulting in fair of uncertainty as time unfolds.
This is due to untenable sentiments towards the revolutionary innovation, saying it is cryptocurrency regulation but hostile in every aspect.
The same hostile conditions facing cryptocurrency in the name of regulation may not be obtained in countries like Japan. These have made numerous enthusiasts to be so much concerned about cryptocurrency regulation in Japan.
Crypto Adoption: How Japanese Government Spearheaded It.
Around March, Japan created a safe haven for cryptocurrency enthusiasts by declaring Bitcoin as a legal means of payments. Crypto adoption began on the go in the country resulting in Japanese having a good look at digital currency.
Bitcoin businesses became the order of the day in Japan, and populace began to adopt the idea since there country created for them, a reason to believe in an innovation taking down the usual means of payment.
A Change In Direction Noticed
Crackdown on cryptocurrencies and their adopters is noticed in different countries. Bitcoin businesses have been the target. While countries like China are taming crypto adopters, Japan kept on giving them a soft ground to propagate.
This was so until the co the second major cryptocurrency hack in Tokyo. We have received the problems caused by MT. Gox, but the lessons obtained therein were not enough to make Japan seek a stiff cryptocurrency regulation until 523 million NEM coins (around $534 mln as at that time) were carted away in the Tokyo based exchange, Coincheck.
Japanese government and regulatory authorities were forced to look into the uncertainties, and finally they step in, putting forward rigid regulatory procedures on cryptocurrency exchanges and companies putting forward Initial Coin Offerings (ICOs).
This regulations resulted in many changes in the country. Different exchanges were called to attention owing to poor performance and management.
As this was noticed, different exchanges came together to form a self-regulation on crypto in a bid to flush the community of irrelevances.
Coincheck Birthed Crypto Regulation In Japan.
Nobody was able to crucify Japan for introducing stiff crypto regulation. It is hard for any country to condone hacks as massive as these –taking responsibility for the two biggest crypto hack in history.
The massive hacks led to the Financial Services Agency (FSA) looking into how exchanges are being run in the country. The first point was Coincheck, which was later discovered to be badly run.
The FSA checked 15 exchanges that have not being approved, while telling other to tender their risk management system report.
This signaled that Japanese authorities are now more concerned about crypto regulation than before.
Talking about an exchange with poor management, FSA said: “The company does not properly evaluate in the virtual currency space, as a result, an appropriate internal control system has not been established”.
In this regard, FSA began to dish out penalties to wanting exchanges while some of them resulted to closing down before the regulatory penalties.
Post Regulatory Clamp Down.
After Japanese regulatory body began to clampdown on exchanges, some of the exchanges began a self-regulatory body. The regulatory body is an idea of around 16 Japanese registered exchanges with the ambition of working with government’s regulatory agency to bring about trusted crypto community in the country.
After the Japan Virtual Currency Exchange Association (JVCEA) was created in Japan, it moved to get rid of debris in the cryptocurrency space. Their aim includes the provision of a guidelines for ICOs.
Among its check and balances is that any exchange caught with insider trading is going to be banned. With the help of FSA, any coin with anonymity property is frowned at.
While JVCEA was working with government regulations, Yuzo Kano and Noriyuki Hirosue, the CEOs of bitFlyer and Bitbank, who worked at the elms of JVCEA as president and vice president were served business improvement letters by FSA. This is no doubt an indication that Japan regulators mean business with their crackdown.
To make things work out on time, FSA has devised a cryptocurrency study group which comprises academics, workers of crypto exchanges and government regulators who are going to be overseers.
Future Of Crypto In Japan.
Japan has a brighter future in the cryptocurrency space, the enclave is creating bedroom and an example for others to follow in matters of cryptocurrency.
With the Japanese authority watching and taming all irrelevances in the country’s crypto space, there is going to be light at the end of the tunnel, since the country is poised at returning sanity to the space while flushing out black sheeps among exchanges and ICOs.