After its initial regulation framework, Japan is all set to revamp it to control the speculative investments that are happening in the cryptocurrency ecosystem. Cryptocurrency investments in Japan were declared as a legal tender in April 2017 by the Financial Services Agency (FSA).
As the primary regulatory body, FSA regulates all the legal proceedings for the economy of Japan. The Payment Services Act was modified in 2017 to make cryptocurrency legal after the exchanges who deal with it register their entity and procure a license of operation. The license will be valid only for the cryptocurrency trade in Japan.
The regulation was enforced as an early adoption for cryptocurrency investments in Japan revolution so that the payments and remittances would be controlled as FSA wanted to avoid any unlawful activity to function under the cryptocurrency umbrella that is anonymous and private. Now the framework is undergoing the knife to control the speculative investments that are happening with cryptocurrencies like Bitcoin.
Earlier FSA developed the framework for a regulated payment channel of cryptocurrencies, but as the landscape started moving more towards investment, it is altering the structure for speculative investments too. As per the higher officials of FSA, the changes will shake up the existing scenario as per the tweaks, the Financial Instruments and Exchange Act (FIEA) will be affecting the cryptocurrencies also according to which the exchanges need to demark the customer funds from the exchange assets so that the investor remains protected.
The speculative investments are seeing regulation from the domestic cryptocurrency investments in Japan on the exchanges also. Japan’s Virtual Currency Exchange Association (JVCEA), a regulatory body founded by 16 crypto exchanges who have the license of trade in Japan are pushing towards putting control on margin trading so that the risk of losses to investors is decreased. Currently, the speculative trading is unchecked, and FSA is not in favor of letting that happen for long.