The Financial Services Agency (FSA) of Japan has recently submitted the approval of 11 companies who operate cryptocurrency exchanges. This has set a large milestone for a market that is otherwise unregulated.
The recent actions by Japan have shown that there is not only a need, but a want for regulation. Japan has made he requirements for cryptocurrency exchanges based on obtaining a license, building secure systems, segregating customer’s accounts, and checking the identity of its users. These may seem like tedious objectives, but they all go towards the goal of legitimizing the industry.
The hopes are that the new regulations that were put in place will help to ensure that the market behind cryptocurrency is not fueled by a black market. There are currently 17 other applicants who are under review for being given a license and only time will tell whether or not they receive it.
The news of regulation comes only a few weeks after China decided to make ICOs illegal as well as crackdown on the cryptocurrency exchanges within its borders. Japan made a statement that they have no intention to ban the sales of cryptocurrency, but rather they would like to see it become a legitimate industry.
This past April, Bitcoin became recognized in Japan as an official legal tender. This means that it will be treated like any other form of currency. After this, the cryptocurrency exchanges within the country were made to register with the government before continuing business.
Over the past year or so, as cryptocurrencies have shot up in value, the trading of the various currencies has gone up in popularity substantially. Japan has become one of the largest countries in terms of trading bitcoin, in the world.
In addition to the rules that China put in place, South Korea put similar laws in place, but less was actually done.
Hopefully, the market can become legitimized as large countries like Japan and U.S. try to find ways to regulate the market.