Japan Renovates its Financial Regulatory Agency to Excel in the Fintech and Cryptocurrencies Industry
According to a news report, Japan implemented improvements to several departments within its financial regulator (Financial Services Agency - FSA) to enhance its dealings with the fintech industry, along with cryptocurrencies; and also to make the financial regulator more effective in facing the financial industry’s issues.
The Changes in the Financial Regulatory Departments
As of today, the newly formed department - Strategy Development and Management Department, that substituted the Inspection Department, is responsible for devising and implementing financial strategies and address the issues involving digital currencies, money laundering, and fintech.
The Policy and Markets Department will be in place of the Planning and Coordination Department and is designated to devise a legal structure that can handle the fast-paced fintech sector. And, the Supervision Department stayed unaltered.
The New Legal Structure
This year, the FSA started initiating legal investigations, and in March it issued legal warnings for seven cryptocurrency exchanges and suspended the activities of additional two exchanges. And, last month, it circulated business development notices to five exchanges stating that their exchanges practices required legitimate management infrastructure
And in an effort to guarantee the optimal protection of exchange customers, the FSA declared, earlier this month, its intention to monitor cryptocurrency exchanges through the FIEA (Financial Instruments and Exchange Act) in place of the Payment Services act. The Financial Instrument and Exchange act will compel securities exchange companies to segregate between corporate assets and customer related securities and funds.
Considerations to Change Taxation Policies
Earlier in June the Minister of Finance and the Deputy Prime Minister were discussing whether they should change the taxation scheme that is currently applied to cryptocurrency transactions (from miscellaneous income to the separate settlement taxation scheme). However, the minister of finance was reluctant to implement such a change as he was concerned about how the public would react to such a change.