Revised laws for regulating cryptocurrencies in Japan is going to be enforced starting next month. According to an official announcement, the revised versions of the Payment Service Act (PSA) and Financial Instruments and Exchange Act (FIEA) would be enforced in the country, effective May 1.
These two pieces of legislation were passed by the Japanese House of Representatives last year to regulate cryptocurrencies in the country. The country was hoping that these laws could be enforced in April this year. However, due to some reasons, the enforcement delayed until last week when the government came out with an official enforcement date.
Japan do not have any official laws regulating cryptocurrencies in the country yet. Hence, amending existing regulations was the only way for these digital assets to have some kind of legal status in the region. For instance, some of the changes in the PSA included changing the term “virtual currency” to “crypto asset”. This was a step to enhance the restrictions on crypto custodians.
Furthermore, starting next month, all crypto trading platforms in the country will have to manage users’ funds separately from their own cash flow. As such, these exchanges need a third-party operator to keep hold of their customers’ funds. They may resort to the use of a more reliable and safer methods like cold wallets for such purpose.
The FIEA on the other hand has also had a couple of amendments. This include the concept of electronically recorded transferable rights (ERTRs) to define that ICOs and STOs would be regulated under the act. In addition, starting next month, crypto asset derivatives transactions will be regulated under the FIEA.
These amendments to the PSA and FIEA are measure that the Japanese government is taking to ensure that crypto-related activities in the country is as safe as possible.