Crypto laws and regulations represent a serious challenge for many companies, as sometimes it is hard to understand how this or that regulations work in their countries. Moreover, in several countries lawmakers as well as regulators are not willing to embrace the crypto industry. As a result, companies are struggling to survive in such countries.
Thus, crypto companies should spend time to learn more about local regulations. For example, people should take into account that there are no official laws to regulate crypto in Japan. Consequently, the only way for digital assets to have any kind of legal status is to amend existing regulations.
Crypto industry in Japan
As stated above there are no specific laws to regulate this industry. Thus, lawmakers decided to amend existing regulations in 2019. Last year, the Japanese House of Representatives passed the Payments Services Act (PSA) as well as Financial Instruments Exchange Act (FIEA).
Interestingly, the revised version of PSA contains many changes. However, some of them are quite basic. For instance, people should use updated terminology, instead of “virtual currency” they should say “crypto asset”.
Nevertheless, there are more important changes as well, such as tightening restrictions on crypto custodians.
Interestingly, the laws mentioned above were scheduled to come into effect starting from April. However, due to unexpected delays, revised versions of PSA as well as FIEA would be enforced starting from May 1.
As a result, starting from May, thus exchanges have to keep users’ money separately from their cash flows.
It means that exchanges should find a third-party operator to keep hold of their clients’ money. Moreover, third-party operators should use reliable methods like cold wallets.
It is worth mentioning that, crypto exchanges should hold the same kind as well as, the same quantities of crypto assets for the clients who would like to use hot wallets. Thus, if someone steals their crypto assets, exchanges will be able to reimburse their clients.
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