Recent months have seen the crypto market getting battered left and right, particularly after the collapse of one of the top exchanges, FTX, and is still struggling to recover.
Despite the bleak outlook, it appears that Japanese regulators have remained positive about the market because they are reviewing and easing crypto regulations in the country.
The market may be tumultuous for now, but regulations in Japan are being loosened for those interested in delving into the crypto space.
Authorities in Japan are now planning on making it easier for crypto exchanges to list tokens on their platforms, as this would boost the liberalization of the crypto industry in the country.
Apart from that, the financial regulatory body of the country, the Financial Services Agency (FSA), has also announced that it would lift the ban that had been imposed on the distribution of foreign-issued stablecoins domestically.
This would come into effect from the next year. Once the ban is lifted from the availability of stablecoins in Japan, it would enable crypto exchanges to begin offering stablecoin trading to users, such as USDT trading.
The governing body of the crypto industry has sent notifications of the change in regulation to all its member companies and it will go into effect right away.
Once these changes are put into effect, it would become a lot easier for companies to get their coins listed, as an extensive screening process would no longer be applicable.
The screening process will only apply if the tokens are new to the market in Japan. There are a total of 33 exchanges that are enrolled with the Virtual and Crypto Assets Exchange Association in Japan.
It issued a ‘green list’ earlier in 2022, which highlighted 18 exchanges that are likely going to be exempted from the screening process.
While Japan has always had a positive stance toward crypto exchanges, it introduced strict rules after there had been a number of high-profile hacks in the country.
The regulation system
In order to prevent the swindling of funds, the Financial Services Agency (FSA) has developed regulatory frameworks that are particularly focused on preventing money laundering as well as terror financing.
The frameworks are quite progressive and have been developed specifically for the digital assets industry.
Bitcoin and other virtual assets are recognized as legitimate property in Japan under the Payment Services Act (PSA).
The number of crypto users has also grown exponentially in Japan, which has pushed the regulatory body to go over its regulations and make adjustments for promoting the growth of the industry.
Interest in Web3 is also on the rise and this has prompted the Japanese government to develop economic strategies for reforming the industry.
It is also expected that there may be changes made to the corporation tax in the country as well, which would be aimed at helping crypto entrepreneurs.
Japan is aiming to become the next crypto hub and it explains why the government is working on growing the digital asset industry as a whole.