According to reports, Trust banks in Japan may soon be allowed to manage digital assets. The country’s regulator, FSA (The Financial Services Agency), made the announcement recently.
However, the FSA will have to deliberate on the matter before deciding. Reports say it would seek public opinion for a month before announcing the new changes.
Nikkei, a local news media, noted this is only a fraction of the FSA’s plan. The regulator also wants to protect investors and increase security in the crypto market.
The FSA plans to achieve this by deregulating the trust banks in Japan. Consequently, the banks can handle digital assets, which the FSA considered volatile and risky.
Recently, the country turned its attention toward regulating the crypto sector. However, the new regulations will likely be effective during Autumn later this year.
Regulation Of Digital Assets In Japan
Presently, there is no restriction on the ownership and trading of digital assets in Japan. However, there have been some regulatory limitations on trust banks regarding crypto management.
Fortunately, upcoming regulations might change the situation for trust banks. In June, Japan became the first to issue a bill regulating stablecoins.
This was after the collapse of Terra, which shook the entire crypto industry. Lots of investors lost millions of dollars.
Due to the regulation, registered banks and financial institutions are now allowed to issue stablecoins. However, the regulation will take effect in 2023.
There are over 13 licensed trust banks in Japan. In March, Bitbank crypto exchange partnered with Sumitomo Mitsui Trust Holdings.
The aim was to allow Bitbank to manage its clients’ digital assets. This is a welcome development for Japanese people looking to invest in digital assets.
Japan Embraces Web3 Technology
Meanwhile, the country has recently embraced the usage of web3 technology. Also, more crypto firms have expanded their operation in the country.
Nomura Holdings, a large brokerage in Japan, is offering BTC derivatives services to users. The popular crypto exchange platform FTX was licensed to operate in the country.
According to the FTX, Japan is a great market for digital currencies. It believes the country’s regulatory framework is favorable for the expansion of cryptocurrency.
In June, Fumio Kishida, the Prime Minister of Japan, acknowledged the potential of Web3. Kishida told the Parliament he is optimistic about Web3 and its economic impact on the country.
As Japan looks forward to better crypto regulations, it is also ready to fight fraud. The fraud issue has become widespread in the crypto space and is gaining momentum.
Furthermore, Japan is currently working on a proposal to sieve all illegally acquired cryptocurrencies. It believes this will stop all organized cyber attacks in the industry.