Japan to strengthen regulation of cryptocurrency trading
Changes to the regulation of cryptocurrency exchanges in Japan are intended to prevent sanctioned countries from using them to circumvent sanctions
Hirokazu Matsuno, Chief Cabinet Secretary of the Japanese government, reported during a press conference that his government is working on a bill that allows reviewing the legal regulations on currencies that allow the inclusion of cryptocurrency exchanges.
The Japanese country plans to modify its Foreign Exchange and Foreign Trade Law so that crypto exchanges are incorporated into the regulations that govern financial entities. The proposed amendment is intended to prevent sanctioned countries from taking evasive action using digital assets.
With the update of the legal precepts, cryptocurrency exchanges will have the obligation, as banks do, to “verify and mark transactions associated with sanctioned Russian individuals or groups.”
Recently elected Prime Minister Fumio Kishida expressed his support for the reform and asked to coordinate measures with Western countries allied to the Japanese government in order to achieve greater effectiveness in the application of the new laws.
As will be remembered, Japan joined with most Western governments to impose various financial sanctions on Russia due to the military actions it is carrying out in Ukraine. In early March, Japan’s regulatory body asked the different cryptocurrency exchange houses to refrain from “allowing transactions for sanctioned parties.”
Protection against international sanctions
The reform of the Law on Foreign Exchange and Foreign Trade by the parliament would establish the obligation that cryptocurrency exchanges must have to “block transactions for several sanctioned Russian officials, oligarchs, banks and other institutions.”
The concern of the Japanese government authorities is focused on the possibility that Russia “attempts to circumvent sanctions using cryptocurrencies”. A concern that arises as a result of the country’s growing interest in the cryptoactive market, coupled with the statements of some of the Russian ministers on the crypto market.
As is known worldwide, the financial sanctions established against Russia have made that country try to implement alternative payment systems and methods that allow them to access international markets and obtain the products and services they require to maintain their economies and at the same time obtain their income.
The use of digital assets as an instrument to evade the sanctions imposed on various countries has been a topic that has been widely discussed by experts in recent days. However, many of the analysts consider that there is no evidence to support this phenomenon, on the contrary, it is “totally unfounded” speculation.
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