Japan’s Financial Service Agency (FSA) set to impose new regulations to govern the decentralized finance (DeFi)-related projects in-country. These regulations will also apply to non-fungible tokens (NFTs). The Financial Service Agency (FSA) is the country’s highest-ranked financial regulatory authority. The regulatory authority in its recent statement elaborated its plans.
The announcement concluded that the regulatory agency would launch a “study group” the study group explore the ways and identify the ethical principles “to practically cop with the digital and decentralized financial matters.” The group will also find ways that how a digital remittance system should work. The study group will also define the paradigm shift regarding digital securities-related items.
The FSA further added that proposed regulations will deal with crypto-related policies, it will also deal with central bank digital currencies (CBDC) and NFTs. The rampant popularity of digital trade and finance has become a matter of concern for the public and private sectors. However, the biggest concern so far is customer data and payment protection.
One of the biggest complications involved in crypto trading is that crypto transactions cannot be tracked. The Financial Service Agency (FSA) said that the aim behind the current regulatory provisions is ensuring user protection. NFTS in particular has become a massive thing for the Japanese. Nowadays more and more crypto exchanges are joining hands with NFTS. Recently, Coincheck, one of the biggest exchanges has listed with NFT.
Although the study group will only formulate the recommendations for FSA, its influence on implementing the proposed points is a secondary thing. The study group does not have the power to influence the decision-making. However, the FSA from the past couple of years taken full control over the Japanese crypto market. Any change ins crypto policy occurs with the permission of FSA.
FSA also said that the study group not just includes regulators and government think tanks executives – it will also involve the private sector stakeholders. One of the most notable members of the committee is the founder of Layer X, the country’s biggest crypto blockchain, alongside Sony’s executive members.
This working group consists of government and public sectors tycoons will be helpful in formulation such provisions that answer the government and public concerns over crypto trading. In addition to that, lawyers and academies will also give their valid inputs.
The panel will be presided by the Tokyo University’s professor named Hideki Kanda. The Japanese regulatory authority is looking forward to integrating the crypto market by joining hands with some of the most prominent names. Unlike other countries which have started a crackdown against the crypto market. Experts do believe that the way Japanese authorities are dealing with crypto stakeholders is ideal for other countries.