Japanese FSA believes that crypto-related firms should be treated as banks.
The Japanese Financial Service Agency (FSA), the chief regulator of Japan's financial services industry, is urging global regulators to treat crypto as traditional financial institutions.
According to the news report shared by BNN Bloomberg on January 16th, Japan’s financial watchdog believes that it is necessary to implement stricter rules and control the crypto sector.
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When talking about the matter, the Financial Services Agency’s Strategy Development and Management Bureau deputy director-general, Mamoru Yanase, emphasized that crypto has become an integral part of financial services all around the world, noting:
If you like to implement effective regulation, you have to do the same as you regulate and supervise traditional institutions.
In the discussion regarding the regulations, the Japanese FSA acknowledged the impact the FTX collapse had on the crypto industry, stating that the problem was not “crypto technology itself” but rather a lack of regulations.
What’s brought about the latest scandal isn’t crypto technology itself. It is loose governance, lax internal controls and the absence of regulation and supervision.
Based on the report, the Japanese FSA is urging authorities in the United States, European Union and all around the globe to supervise crypto-related firms. FSA has reportedly shared its concerns through “an international body <...> working on global regulation of crypto asset activities,” called the Financial Stability Board.
In his speech, Mamoru Yanase claimed that countries must “firmly demand” cryptocurrency exchanges to take measures to protect their customers, prevent money laundering, implement strong governance and internal controls.
On top of that, Yanase suggested that local officials should be given a right to conduct “on-site inspections” to ensure that client assets are appropriately managed using offline wallets.
Japan is not the only country calling for global crypto regulations. Right before the new year, The Reserve Bank of India (RBI) stated that it expects to use India’s G20 (Group of Twenty) presidency to start discussions on developing a global crypto regulatory framework.