Japan’s Financial Services Agency Proposes Loosening Regulations for Cryptocurrency Brokerages
The Japanese Financial Services Agency (FSA) is considering new regulations for cryptocurrency brokerages to facilitate businesses and ensure a safe customer experience.
Currently, any entity involved in crypto transactions is subject to the same regulations as full-fledged exchanges, even if they only provide intermediary services. The FSA recognizes that this can hinder innovation and pose unnecessary obstacles for safe business providers entering the market.
Japan’s Lighter Regulations for Crypto Brokerage
The proposed “Crypto-asset and Electronic Payment Means Brokerage” category would apply to firms that connect crypto buyers and sellers without holding funds or managing wallets. This would reduce the potential for fraud and mismanagement, as well as decrease risks and enable lighter regulations, streamlining compliance and promoting market entry for new businesses.
Japan’s FSA is considering requiring these brokerages to be affiliated with a parent organization, including licensed crypto exchanges or electronic payment institutions. These “parent” organizations would oversee brokerage activities, provide training, and assume liability for any user harm resulting from misconduct. This model encourages strict supervision and careful selection of affiliates.
Alternatively, the FSA may impose service restrictions and mandate financial guarantees, such as security deposits or insurance, to cover potential losses.
This alternative model would involve: 1. Service Restrictions: Limiting the types of services the brokerage can offer; 2. Financial Guarantees: Requiring the brokerage to provide a security deposit, surety bond, or professional liability insurance to compensate users in case of losses.
Overall, the FSA is intensifying its efforts to foster innovation, prevent bad actors, all without burdening firms with heavy regulations.
Also Read: FCA to Implement UK Crypto Regulation Framework by 2026
Source link
#Japans #FSA #Pitches #Relaxed #Regulation #Crypto #Brokerages
