Financial Services Agency (FSA) of Japan is set to adopt and implement Financial Action Task Force (FATF). Particularly, the travel rules and standards contained in the FATF will be employed upon the Japanese crypto industry. Global Digital Association has instructed Japan’s crypto exchanges’ association to ensure cooperation with FSA.
Japan is almost near to launch its very first centrally controlled cryptocurrency i.e. Central Bank Digital Currency (CBDC). Cryptocurrencies are as popular in Japan as they are in elsewhere. However, still there is an acute shortage of crypto adoption by prominent individual investors and institutions. In fact last month a report was published by CoinDesk which suggested that only 18% of investors in Japan are holding cryptocurrencies.
However, since the induction of cryptocurrencies, at least 125 million persons in Japan are part of the crypto industry. The establishment of local and international crypto trading platforms is still on the horizon in Japan.
Now the Japan’s FSA has revealed that it is time to make the crypto industry environmentally safe and in accordance with international standards. FSA revealed that it has decided to adopt and implement international guidelines known as Financial Action Task Force (FATF). These guidelines will be employed upon the digital assets as well as upon those who render services in digital assets. FSA told that the travel rules and standards made under the FATF guidelines are essential for the advancement of the Japanese crypto industry.
For this purpose, FSA has also sought cooperation from Japan’s association of crypto-asset exchanges known as JVCEA. JVCEA’s assistance has been required for ensuring that the guidelines are implemented in letter and spirit throughout Japan. FSA further clarified that a roadmap has to be incorporated before implementing the guidelines. For preparing the roadmap all stakeholders have been invited to join FSA to decide on a comprehensive doable framework.
However, it was told by the Government that the guidelines will not be implemented for the time being. In fact, they will be implemented at the year close i.e. in 2023. It seems that Japan is aligning its crypto industry with that of South Korea. Earlier, it was South Korea that adopted the FAFT guidelines. But the crypto industry in South Korea is massively huge when compared with Japan. In fact, the daily crypto trade and exchange volume in South Africa is in 7 to 8 Billion Dollars per day.
Similarly, in March 2021, South Korea had adopted Anti Money Laundering (AML) policy as well.
Meanwhile, Global Digital Finance (GDF), which looks after the virtual asset industry globally, also urged Japan’s JVCEA to ensure cooperation.
Both these policies such as AML and FATF are as per international standards and have been implemented upon by several countries. Both are already part of the traditional financial sector but have been gradually adopted by states for incorporation within their crypto industry as well.
