Japan to Turn Cryptocurrencies from Legal Currency to Financial Product
Japan’s FSA has contemplated changing the legal status of cryptocurrencies into that of a financial product as opposed to a legal method of payment. The FSA is a leading authority in Japan responsible for monitoring and regulating banks, insurance agencies and other financial businesses operating within the country.
Bitcoin is considered a form of legal tender due to the fact that all operating exchanges that deal with cryptocurrencies are properly regulated as per the PSA. Complying with Japanese laws, any currency digital coin exchange must legally possess a license granted by the FSA to operate within the nation’s borders.
Financial regulators in Japan came to a decision that current cyber security efforts were not strong enough to provide protection for the cryptocurrency after a series of hacking attempts proved to be successful.
The FSA plans on adopting the cryptocurrency exchange market under the rules and regulations of FIEA. This move will then turn cryptocurrencies from a legal tender to a financial product which means that all laws and regulations imposed on securities will apply to cryptocurrencies.
This plan hopes to reshape the cryptocurrency industry, making it safer and more closely monitored by regulators. Businesses involved in cryptocurrencies will abide by all the new changes to provide customers and clients with better protection, as well as ensuring the safety of transactions for users.
Authorities were forced to take a stronger and more restrictive stance on regulations after Coincheck was hacked, resulting in a reported theft of more than five-hundred million dollars’ worth of NEM tokens.