Japan urges other countries to regulate crypto companies like banks News ▸ Japan ▸ Regulation
Japan urges other countries to regulate crypto companies like banks
A top official says the U.S. and Europe should closely supervise crypto firms.
2 min read
Updated: Jan. 17, 2023 at 2:26 am UTC
Cover art/illustration via CryptoSlate. Image includes combined content which may include AI-generated content.
Japanese regulators are calling for other countries to regulate cryptocurrency like banks, according to a report from Bloomberg on Jan. 16.
Mamoru Yanase, Deputy Director General for the strategy bureau at Japan’s Financial Services Agency (FSA), spoke to the news company. He said:
“Crypto has become this big…If you like to implement effective regulation, you have to do the same as you regulate and supervise traditional institutions.”
Yanase went on to comment on the collapse of FTX. He asserted that cryptocurrency’s mere existence did not cause that event. Rather, he warned that “loose governance,” “lax internal controls,” and poor supervision led to the company’s massive scandal.
As such, he said that Japan’s FSA has begun to urge similar regulators in other countries — including the U.S. and Europe — to regulate cryptocurrency exchanges as thoroughly as they would regulate banks. He said that Japan has been advocating for global crypto regulation through its position within the international Financial Stability Board.
Yanase suggested that foreign regulators could demand new measures from crypto exchanges during the interview. One such measure could be on-site inspections to ensure that companies manage client assets correctly. He also suggested a “multi-national resolution mechanism” to help countries work together if large companies fail.
Despite such calls for regulation, Japan is often recognized as a reasonably crypto-friendly country. There are few regulations restricting cryptocurrency, and companies that wish to work with crypto are permitted to register as cryptocurrency exchanges.
The country is acting even more permissively in certain areas. Japan has recently announced plans to lift a ban on foreign stablecoins. It also funds the development of metaverse and NFT-related projects through government investments.
Some crypto companies are reducing their presence in Japan. Kraken and Coinbase both plan to end or greatly reduce operations in the country. However, that trend appears to be due to local market conditions rather than specific restrictions on crypto.
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Author 
Mike Dalton
Before transitioning to crypto writing in 2018, Mike studied library and information sciences. Currently, he resides on Canada's West Coast.
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FTX
FTX is a defunct cryptocurrency exchange, currently in bankruptcy proceedings, that was founded by Sam Bankman-Fried and Zixiao “Gary” Wang in May 2019.
Kraken
Kraken is a San Francisco-based digital asset exchange in euro volume and liquidity that trades various currencies, including Canadian dollars, US dollars, British pounds, and Japanese yen.
Coinbase
Coinbase is a digital currency exchange and wallet service that allows individuals to buy, sell, and store digital currencies, such as Bitcoin, Ethereum, and Litecoin.
