Japan Indicates Regulation for Cryptocurrency Wallets
Japan is one of those countries that have granted autonomy for the cryptocurrency industry in the sense that it is self regulated. However, there are indications that Japanese authorities wish to keep a close watch on the activities of cryptocurrency operators. In a report recently published in Bitcoin News, it was revealed that Financial Services Agency of Japan plans to put in place a regulatory framework for cryptocurrency wallets. What this means is that while the government will allow the industry to regulate itself, wallet services in this industry will have to be registered with FSA. Interestingly, regulation of the government will apply only to wallet services that are operated by a third party. These cryptocurrency wallets are also referred to as custodial wallets. Other wallets, including those that belong to hardware or software categories, will remain unaffected with this regulatory policy.
The main objective behind introducing regulation for cryptocurrency wallets is to maintain international standards against money laundering and terrorism related activities. Another aim is to reduce risk associated with wallet services like hacks, failures, and thefts.
Once these proposed regulations are put into place, cryptocurrency wallet service providers will have to abide by the KYC guidelines. No dates have been provided by the authorities about the implementation of these regulations. However, government has made it clear that no cryptocurrency wallet service provider will be allowed to continue its operations if it fails to abide by these regulations.
It is no secret that there are many entities in Japan that are operating illegally as Cryptocurrency wallet companies.