Japan: What are the regulatory changes around bitcoin?

Throughout these years, Japan has had a positive attitude towards the use of bitcoin and other cryptocurrencies in its territory. Precisely because of this favorable opening, there are 3,5 million active cryptocurrency investors in the country, he said. Coin Insider. Of this number, according to statistics from the Japanese Financial Services Agency (FSA), most investors are between 20, 30 and 40 years old. Which, certainly, should not surprise us given that it is the age group that is most favorable to these risk investments.

What are the most common cryptocurrencies in Japan? Bitcoin, Ethereum, Litecoin, and Ripple.

Similarly, they reported that the volume of operations grew from USD 22 million in 2014 to USD 97 million in 2017.

Why is the FSA releasing this data? According to Coin Insider, the goal is to achieve transparency about the cryptocurrency market in your country.

With this prior context, the FSA is adopting the "travel rule" originally established by the Financial Action Task Force (FATF) that seeks to reduce the scenarios of money laundering and terrorist financing, reported Crypto newss.

How does it work? Under this new regulation, virtual asset service providers such as exchanges or other platforms that provide crypto services (custody or not) for a value greater than USD 1000, must share the data of their users with the government. What data are we talking about? In the case of the sender, their names, surnames, account number, physical address, identity card, place and date of birth will be reported. In the case of the recipient, only his name and account number will have to be reported.

Was there something similar before? Yes, some exchanges have the self-regulatory mechanism "know your customer" that allows them to achieve a certain degree of identification of their users, clearly, not at the level of this new regulation that we discussed.

The critics? Obviously they point to the affectation of the privacy of the users. In that sense, according to Peter Van Valkenburgh, Research Director at Coin Center: “These measures are reasonable for banks or financial institutions where money is frequently laundered, but totally inappropriate for people who wish to preserve their privacy when participating in these networks."

When will it go into effect? April 2022. With which, they have one year to implement the necessary steps to be able to systematize the delivery of this information to the government entity.

With this new regulation, will Japan manage to maintain the growth curve of its volume of investments in crypto? It will take a few months to find out.

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Marilú Lazo
Lawyer from the Pontificia Universidad Católica del Perú (PUCP). Director of The Crypto Legal Blog, she has experience in corporate advice, consumer protection, as well as in matters of personal data protection and new technologies.


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