Japanese Parliament OKs Crypto Law Changes, Limits Speculative Trading
Japan’s parliament has approved amendments to two financial laws – officially changing the legal name for cryptocurrencies to “crypto assets,” and outlawing market manipulation.
The country’s upper house approved amendments to the Fund Settlement Act and the Financial Instruments and Exchange Act on the morning of May 31. Per Nikkei, the amendments “include measures to strengthen the regulations governing cryptocurrency exchanges and transactions.” The legal changes are expected to come into effect as of April 2020.
The move represents a breakthrough for the regulatory Financial Services Agency (FSA), the government body charged with policing the country’s cryptocurrency exchanges.
The FSA had been hoping to make legal changes of this sort of scope following a series of “working group” sessions, which presented their findings at the end of last year. However, the FSA appears not to have yet pushed ahead with proposed plans for initial coin offering (ICO) controls.
The government says the move to rename cryptocurrencies as “crypto assets” was made in line with the stance of most G20 nations, who prefer the term “asset” to “currency” when talking about Bitcoin and altcoins.
Nikkei also reports that the changes put limits “on speculative trading,” and it looks like the laws will now also include clauses pertaining to margin trading, which is considered to be very risky, that fall in line with limits set by the self-governing Japanese Virtual Currency Exchange Association (JVCEA) – an association comprising all of the country’s licensed exchanges. The JVCEA has put a 4:1 cap on margin trading at exchanges.
The legal changes also specifically outlaw the manipulation of cryptocurrency markets for the first time, granting the police the power to charge individuals it suspects of attempting to bring about price rises or drops.
The FSA is expected to continue to push for further regulatory powers, stating that it wants to continue to “protect investors” with tougher regulations.
As previously reported, Japan is hoping to convince the rest of the G20 that cryptocurrencies should be regulated at next month’s G20 summit in Osaka. Also, as reported today, in an effort to prevent digital money laundering, the G20 countries are expected to agree on creating a registry of cryptocurrency exchanges.