All eyes have been on China for the past month or so, not many people have been paying attention to other Asian countries! Just yesterday, Japan’s Financial Services Agency (FSA) announced that it has approved 11 cryptocurrency exchanges to operate within the country.
The Japanese government recognized bitcoin as legal tender back in April and required cryptocurrency exchange operators to register with it. The move was aimed at avoiding a repeat of the failure in 2014 of Mt Gox, the world’s largest bitcoin exchange at the time.
There are various requirements in order to be a licensed exchange in Japan, including: building a strong computer system, segregation of customer accounts, and checking the identity of customers (a key issue given concerns cryptocurrency could be used for money-laundering).
Since China has recently cracked down on cryptocurrencies (although, I feel the end is near), Japan has quickly taken their position as the biggest Bitcoin trading hub. Notably, bitFlyer–whose BTC/JPY trading pair regularly ranks as one of bitcoin’s top three highest trading volumes – was one of the exchanges licensed during this first round of approval.
The list of licensed exchanges also includes: QUOINE, Bit Bank Corporation, SBI Virtual Currencies, Bit Trade, BTC Box, Bit point Japan, Fiscal Virtual Currency Exchange, and Tech Bureau.
With the new regulation, Tokyo aims to balance the need to protect investors with the need to support fintech innovations, FSA officials said. Officials this month said they have no plan to ban initial coin offerings (ICOs), although there have been few launches of token-based digital currencies in Japan to date.