Inside Japan’s Bitcoin and Blockchain Regulation Efforts
Reports showcase that over the last few years, the Japanese blockchain industry has grown considerably. This growth was further accelerated by the Covid-19 pandemic, thereby leading to higher levels of adoption. This is also the case with cryptocurrencies which have recently reported growing trade volumes.
When blockchain tech was still in its infancy, Japanese regulators decided that it’d be best if blockchain and crypto-related companies were heavily regulated. This decision made sense at the time, granted the high profile Mt. Gox hack that occurred inside the Asian country.
However, recent local reports seem to suggest that Japan is considering easing its aggressive efforts of regulating this booming industry. According to a recent statement made by Taro Aso, the deputy prime minister, cooperation between the blockchain community and regulators is required. According to the leader, there’s no need for hostility derived from the assumption that regulatory efforts are bound to block innovation. He then urged regulators and the blockchain community to collaborate in order to create a regulatory framework that can protect consumers without hindering industry innovation.
The deputy PM is well-aware of the fact that blockchain technology has many roles to play, therefore acknowledging some of its main use case scenarios. Aso also spoke of blockchain’s role in creating a Covid-19 contact tracking solution that ensures user privacy. This is especially relevant given the potential danger that the pandemic poses to the world.
Despite Aso’s statements, it seems like some regulators are unwilling to soften their policies. For instance, when speaking of cryptocurrency regulation, the chief of the Japanese Financial Services Agency stated that a softened regulatory framework will not promote innovation in the industry. He also specified that Japan should actively focus on promoting central bank-backed digital currencies, rather than traditional coins like bitcoin and ether. This statement makes sense given the CBDC fever that’s taking over the world.
Quite a few governments have expressed their willingness to develop CBDCs that would virtually replace cash and many e-money payment methods. While there are many benefits associated with CBDCs, members of the cryptocurrency community are avid believers in the idea that such currencies would facilitate the creation of a centralized and non-private financial market, which is exactly what cryptocurrencies are trying to avoid.
In regards to bitcoin casinos, Japanese authorities have not confirmed whether they’re planning to further regulate this booming industry. Luckily, apart from being licensed and well-reputed, most Japanese cryptocurrency casinos employ multiple safety and fairness protocols.
Based on everything that has been outlined so far, current regulatory trends suggest that cooperation and good-willed governance are desired when it comes down to regulating the Japanese blockchain industry. This will likely foster innovation and lead to the adoption of smarter blockchain-based applications.
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