Japan Focuses On Speculative Investment with New Regulations

The Financial Services Agency, the official regulator in Japan, is apparently looking to revamp their regulations aimed at cryptos as a means of combating and shedding down on speculative investing. Last year, the FSA implemented new laws that reviewed Japan’s Payment Services Act to classify digital currencies as legal payment assets. This step by the FSA came during a time where local crypto-exchanges were forced to sign up with the FSA and acquire an operating license.


The FSA made it a requirement that the general framework should be prepared for a massive spike in digital currency adoption, most notably within their payment and remittance usage. An official from the FSA stated that the agency had made efforts to avoid any cryptocurrency lack of laws.

Despite this, the FSA did not predict that individuals would instead adopt digital currencies for investment as opposed to methods of pay. In light of this, the agency is now looking to rework the regulations in place as a means of handling speculative investing by local residents. A group of experts last year were joined together by the FSA in order to bring regulations and actual use of cryptocurrencies closer, displaying another sign of a regulation revamp.

Following reports from last month, the agency is attempting to include digital currency exchanges as part of the FIEA, with laws that may be applied to traditional brokerages and companies involved in securities. Following the Act, companies under regulation are mandated to separate client finances from company assets that usually garner even stronger protection standards.

Additionally, nation crypto-exchanges have suggested self-regulation. The JVCEA has proposed a limit on margin trading by a 4:1 ratio as a means of allowing customers to borrow only four times what they deposit at any given time. As a protective measure, designed to keep customers safe and cut down on their risks with investment, the proposal comes at a time when Japan has yet to set any limits on borrowing for trading. A few of the local crypto-exchanges of a 25:1 limit as opposed to the proposed 4:1.

According to the FSA, this means of trading has yet to be handled and regulated. Should the proposal pass, digital currencies would be seen as financial products and every door towards the mainstream will be open.

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