Japan Ready To Help G20 Nations With Crypto Regulation Guidelines And Solutions
Japan Ready To Help G20 Nations With Crypto Regulation Solutions
Japan is one of the first and among the very few with some of the finest crypto regulations in place, which makes it one of the crypto capitals of the world. To understand the dominance of Japan on the crypto space consider this, a few months ago Japanese native currency Yen surpassed the trading volume of US Dollars for a brief period of time. Now, Jpan is p[reparing to help other G20 nations with their crypto regulation framework and laws. Japan is in talks with several finance ministers and central banks of the G20 nations. The help from Japanese regulators will be organized through an upcoming summit in June.
Japan is years ahead of the majority of the nations in the crypto game since they realized the potential in crypto back in 2017 and even legalized it for the public use. To give you a perspective, most of the so-called crypto friendly nations only allows for business use of cryptos like exchanges and trading, while public use and a common mode of payment are very rare.
In order to help other nations to be as crypto friendly as Japan, the regulators have created a handbook that each G20 country can use to outline their framework and also prevent the outflow of virtual currency. The details about the regulation submit and the regulation handbook was extensively covered by the local daily Sankeibiz. The editorial about the proposed regulatory help read,
“International rules are being developed to prevent money laundering and terrorist financing, with virtual currency restrictions in place,” the news outlet described Monday. “On the other hand, there are no rules in terms of the protection of customer assets and the soundness of the market, so it is the first time that certain ideas are shared internationally,”
The decision by Japan might come in light of many countries failing to properly draw the framework and some not being able to execute it properly. Japanese regulators said that they understand that being a new technology, it's difficult to draw the Dos and Dots, thus they are including everything in the manual to help these G20 nations. The local editorial read,
“Since it is difficult to establish common rules, we [Japan] decided to put them in a guidebook, to have the know-how in a form that suits each country, and to raise the level of regulation.”
The local media report suggest that the manual created by the regulators have everything necessary requirements to ensure safety and wider user of virtual currencies. The manual covers some of the very crucial aspects like Necessary measures to protect customer assets,” “Measures against cyber attacks,” and “Ways of providing information to customers.”
Japanese Regulators Have Learned From The Experience Of Two Major Exchanges In The Country Getting Hacked
Although Japan is among the most pro-crypto nations, it also attracts the interest of hackers. Only last year, Japan has been at the receiving end of two exchange attacks one on Coincheck in January and Zaif in September. The Financial Services Agency (FSA), came into action quite spontaneously by increasing the oversight of crypto exchanges including conducting on-site inspections and issuing business improvement orders
The FSA has also been conducting several study group meetings which lead to new proposed measures for the crypto space. Earlier this month, the FSA released a guide containing reference cases to help financial institutions identify suspicious crypto activities and report them to the concerned authorities as per Article 8 of the Act on Prevention of Transfer of Criminal Proceeds.
How FSA Determined Suspicious Transaction Activities
The FSA compares the trading activities of the consumers with their personal income and the asset they possess, and if the large sim of the transaction does not meet with their income than they are considered to be suspicious transaction activities. Another form of transaction patterns that might put traders under suspicion if someone receives a large amount and immediately transfers it to someone else, or if someone has made several small transactions simultaneously.
There are many other factors that the regulators use to filter out suspicious transaction activities include someone having multiple accounts under dubious names are red flagged. Given there are several privacy coins like Monero which promises total anonymity of the transactions, if a trader is found using such privacy coins for transactions, even they fall under the suspicion radar.
Hopefully, the regulatory handbook created by Japanese regulators would help other nations to at least know what they were doing wrong, and then use it to build a robust crypto framework which will benefit everyone.