- The Financial Action Task Force deemed Japan’s measures inadequate
- Japan planned to remove the ban on stablecoins issued in foreign countries
On Tuesday, May 23, Japan's Cabinet decided to impose more severe anti-money laundering measures starting in June. This will be done to bring laws in line with international standards and trace crypto transactions, Kyodo News wrote.
The Financial Action Task Force, an international finance regulator, deemed Japan’s measures inadequate, due to which the country revised its laws in December last year.
New travel rule
Finance watchdogs have been upping the ante on crypto asset monitoring because digital assets are often used to launder money. Japan’s new framework involves enforcing a new so-called travel rule to intercept proceeds from criminal activity.
Under the new rule, banks and other financial institutions are required to pass on customer information, such as the names and addresses of the sender and the recipient in crypto transactions.
The digital assets targeted include crypto and stablecoins pegged to a global fiat currency like the US dollar or a commodity like oil or gold. The IMF recently suggested crypto companies and stablecoin issuers enforce bank-style capital requirements.
Japan planned to lift stablecoin ban this year
At the end of last year, crypto.news reported that Japan’s Financial Services Agency planned to remove the ban on stablecoins issued in foreign countries. The amended stablecoin law aimed to regulate all digital currencies. Only banks could issue them from then on. Money transfer companies could issue them if they provided collateral.
Crypto popularity and regulation in Japan
Japan has been one of the leading countries in terms of cryptocurrency adoption and regulation. Bitcoin gained significant attention in Japan following the collapse of the Mt. Gox exchange in 2014, which was based in Tokyo.
After that, the Japanese government took steps to regulate the cryptocurrency market to protect consumers and promote innovation. In April 2017, Japan passed a law establishing guidelines for cryptocurrency exchanges. As a result, the country became a major hub for cryptocurrency trading and innovation. Now, the next series of legislative changes is required.
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