Japan is creating a positive regulatory ecosystem for cryptocurrency exchanges. Tightening the rules for new and existing firms is a big step forward. The FSA is introducing new guidelines for aspiring cryptocurrency exchanges looking to enter the Japanese market.
Cryptocurrency is a hot commodity in Japan. Thanks to positive regulatory developments, the demand for Bitcoin and altcoins continues to rise. For aspiring crypto exchanges, this creates a lot of new business opportunities to explore. Growth can only occur if all companies adhere to guidelines introduced by the Japanese Financial Services Agency (FSA).
Earlier this week, the FSA made it clear up-and-coming companies need to meet strict guidelines. For the cryptocurrency industry, that is a more than welcome development. Earlier this year, Japan introduced regulations requiring cryptocurrency exchanges to undergo rigorous verification and licensing processes. These rules will remain in effect for the foreseeable future, though new applications will go through a slightly revised screening process.
New requirements include the submissions of board meeting minutes, among other things. The FSA is intent on verifying that all exchanges will take the necessary precautions to keep customer funds safe. Moreover, trading platforms need to sustain their financial health at all times.
It is the first time Japan’s FSA will screen new cryptocurrency exchange applicants. The process was suspended indefinitely earlier this year following the hack of the Coincheck exchange. All of the new developments have resulted in a far more robust ecosystem. Bringing more legitimacy to Bitcoin and altcoins is still a top priority for the Japanese government.
The FSA sets the tone in terms of how cryptocurrency needs to be regulated. All service providers need to adhere to a set of rules. Those rules need to be flexible and change based on market conditions and industry growth. So far, all imposed changes in Japan have yielded more than positive results. It is now up to other countries to build a similar ecosystem in the years to come.
For the time being, most countries hold off on regulating Bitcoin. India is the next country to make its decision on this industry. A supreme court hearing will take place on September 11th to determine the fate of cryptocurrency. No one knows what the outcome will be exactly. A ban on cryptocurrencies is still a big possibility. Such a result would be very unfortunate for the cryptocurrency industry.
What do you think about the FSA implementing additional guidelines for new cryptocurrency exchanges? Will it harm or hurt the cryptocurrency industry? Let us know in the comments below.
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Tags: cryptocurrency exchanges, FSA, Japan, regulation