Hassan Maishera
The head of the Japanese Financial Services Agency (FSA) has admitted that operating a cryptocurrency exchange is tough in the country, and they won’t be easing it anytime soon.
Operating a crypto exchange in Japan is tough
Financial Services Agency Commissioner Junichi Nakajima has admitted that there are a lot of restrictions to operating cryptocurrency exchanges in Japan. According to the FSA boss, the restrictions are to provide more protection to investors in the emerging market.
Nakajima pointed out that he believes in the potential benefits of cryptocurrencies like Bitcoin in providing faster and cheaper ways for people to send money. However, he lamented that they are currently used as speculative assets and not as a medium for transferring funds. The growth of the market is also presenting more challenges to regulators, especially in fields like decentralized finance (DeFi) and others.
In an interview with Bloomberg, Nakajima stated that “We need to consider carefully whether it is necessary to make it easier for the general public to invest in crypto assets.” While investors in other countries have free access to invest in DeFi tokens, Japan doesn’t allow that.
The FSA launched a study group of experts last month and is expected to consider regulatory responses to DeFi over the next few months. Nakajima admitted that the current regulatory framework on crypto exchanges has been very effective in ensuring customer protection and anti-money laundering. However, most of the 31 registered exchanges are struggling financially, he added.
Cryptocurrency exchanges like Binance are facing increased scrutiny globally. Binance, in particular, has come under heavy regulatory pressure. The Financial Conduct Authority in the United Kingdom banned Binance Markets Limited from operating in the country, resulting in some major banks like HSBC, Barclays and Santander blocking Binance payments.
The exchange has also been banned from operating in Malaysia while it has received a warning from Italian regulators for operating without a license. Binance is making changes to how it operates to ensure it stays on the good side of regulators.
