The Japanese Financial Services Agency (FSA) has begun reviewing whether exchanges dealing with digital currencies, such as bitcoin, have been making efforts to protect users, reported the Sankei Shimbun on Saturday. The news outlet also wrote that as of June 30:
According to the Financial Services Agency, about 50 registrations have been received.
50 Bitcoin Exchanges Have Filed with Japanese Financial AuthorityIn April, the Japanese government amended its fund settlement law to recognize bitcoin as a legal means of payment, putting the FSA in charge of digital currency. Bitcoin exchanges are then required to register with it.
Businesses operating digital currency exchanges prior to April have until the end of September to register. While no exchanges have been registered as of July 31, the publication noted that “more than ten companies out of 20 to 30 companies will register.” However, the publication did not clarify whether the 10 are part of the 50 aforementioned applications.
FSA Starts Reviewing Exchanges
Before an exchange can be formally registered, its application is reviewed by the FSA to ensure that the requirements as mandated by the amended law are met. If the agency finds no problem in the preliminary examination, the exchange will proceed with the registration process and start a full review.
Specifically, the FSA first checks whether the exchange has taken proper measures to protect users and has properly communicated the risk of loss resulting from price fluctuations to them, the publication explained. The agency also examines whether the assets of the company are clearly separated from user deposits as well as checks for a proper risk management system which should be regularly reviewed.
Types of Exchanges
In Japan, not only are there startups that operate bitcoin exchanges like Bitflyer and Coincheck, but there is also a growing number of large corporations adding bitcoin exchanges as part of their services.
50 Bitcoin Exchanges Have Filed with Japanese Financial AuthorityBefore April 1, some corporations have already entered the space. Remix Point Inc, a publicly-traded conglomerate with a market value of about 21 billion yen (approximately $192 million), launched the bitcoin exchange Bitpoint in March last year. The Jasdaq-listed financial information provider Fisco Ltd, which recently issued Japan’s first corporate bitcoin-denominated bond, set up a bitcoin exchange in April last year as well.
After April 1, some forex brokers have launched or are launching their own bitcoin exchanges. Internet giant GMO, which operates the world’s largest forex broker, GMO Click, launched its own bitcoin exchange in May. Originally called “Z.com Coin by GMO,” the exchange changed its name to “GMO Coin” on August 8. Other forex brokers entering the space include SBI Holdings and Money Partners Group, but they have not yet announced opening dates.
What do you think will happen in Japan if all 50 bitcoin exchanges launch soon? Let us know in the comments section below.
Images courtesy of Shutterstock and Nikkei
