Japan to Start Enforcing New Crypto Laws Soon
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And, although it seems like a tiny change, it’s actually big. There’s a huge difference between crypto assets and virtual currencies. Under the new law, crypto exchanges will have to manage their users’ money separately from cash flows.
Cold wallets will be a must for money – in case you insist on hot wallets, the exchange must own the same quantity of crypto assets. This is done so it could reimburse you in the event of theft.
Big Changes Coming
The revisions to the Financial Instruments and Exchange Act (FIEA) include the sole concept of electronically recorded transferable rights. To put it simply, it regulates initial coin offerings and security token offerings. Crypto derivatives make up for 80% of existing trades, yet they are unregulated, and with that, illegal. Starting from May 1, this will change.
This is great news for crypto owners and traders in Japan. The updated law aims to regulate the market, which, as many call it, is known to be a bit of a Wild West. Thanks to the updated legislation, Japan might end up being a safe haven for cryptocurrencies. The latest move by the government will eliminate fraudulent activities in the digital asset sector which is definitely a move in the right direction.
Up until now, the Japanese laws regarding cryptos were pretty strict. The country was pretty Bitcoin-friendly in the past until the Coincheck hack. Since then, all crypto exchanges were required to obtain a license in order to operate in the country. A total of 23 exchanges are permitted to operate in the country, but some of them are yet to open their ‘doors’.
The updated laws are expected to give Bitcoin and cryptos a boost in Japan. With the leading cryptocurrency currently in the middle of a mini-renaissance, this is great news for crypto owners.
The New Law Could Give Bitcoin a Major Boost
In the middle of the coronavirus COVID-19 global pandemic, Bitcoin is enjoying a resurgence in price at the moment. The price went up double in the past few weeks after hitting an unexpected low below $4K. The news for Japan could provide it with another price boost that will send the cryptocurrency flying.
Public support from athletes such as UFC star Ben Askren will surely help as well. Japan’s new laws will effectively legalize Bitcoin transactions in the Asian country up to a point which can only be a good thing. For years, countries have overlooked cryptocurrencies due to pressure from banks and financial institutions.
However, decentralized currencies are obviously the way forward. With more and more countries realizing the advantages Bitcoin offers, it could pave the way for new industries such as Bitcoin gambling that could provide stable cash flow for their economies.
