The new head of Japan’s primary financial regulator has backed the domestic cryptocurrency sector to grow while ruling out ‘excessive’ regulation for exchanges.
In statements certain to encourage the domestic cryptocurrency sector, Toshihide Endo, the newly appointed commissioner of Japan’s Financial Services Agency (FSA), told Reuters that the authority is aiming to ‘strike a balance’ between protecting consumers while promoting innovation within the sector without restrictive policies targeting cryptocurrency exchanges.
The regulatory chief told Reuters:
“We have no intention to curb [the cryptocurrency sector] excessively. We would like to see it grow under appropriate regulation.”
Japan has already taken a proactive lead among the world’s major economies by becoming the first nation to enact legislation that recognized cryptocurrencies like bitcoin as a legal method of payment while regulating cryptocurrency exchanges under a national licensing program.
At the time, the FSA was led by Nobuchika Mori, the agency’s longest-serving chief who took a technology-friendly approach to emerging technologies including blockchain and fintech after losing ground to the likes of China and South Korea. “The forward-thinking approach of Mori and the rest of the FSA allowed Japan to eventually evolve into the largest crypto exchange market in the world, easily surpassing the US and South Korea,” our site contributor Joseph Young wrote earlier in June when it was revealed Mori would be stepping down.
While China and Korea see over 50% of their societies adopting cashless payments, Japan’s rate of adoption stands at relatively meager 19%. In a marked effort to catch up, the FSA and Japan’s Ministry of Economy, Trade and Industry (METI) embarked upon a FinTech growth strategy last year to promote cashless payments, targeting a 40% adoption rate within a decade.
Earlier this year, an infamous $530 million theft of cryptocurrency from Tokyo-based cryptocurrency exchange Coincheck – an unlicensed operator – led to the FSA ramping up its scrutiny into the sector with spot checks of exchanges, business suspension orders and even a rejection of an application to register a cryptocurrency exchange.