Japan is reportedly set to implement a self-regulating organization for the country’s cryptocurrency sector. This move comes as a joint effort, pushed through by 16 different licensed Japanese cryptocurrencies, and the authority is intended to boost confidence in the Japanese cryptocurrency industry. Voices have been raised over the need for this type of body – and measures to reinvigorate investor trust – in the wake of the $530 million Coincheck hack this past January.
This news comes from the local news outlet ”Asahi Shimbun”, which reports that the sixteen cryptocurrencies have now launched the self-regulating body. The agency will be known as the ”Japanese Cryptocurrency Exchange Association”, or JCEA for short. Furthermore, the body will not only have a hand in developing industry-wide standards for blockchain and cryptocurrencies – it will also look to eatables and maintain clear guidelines for ICOs.
The JCEA will do this work in tandem with the Japanese financial regulator, the Financial Services Agency (FSA). Moreover, ICOs have been somewhat of a ”free-for-all”, as they have lacked proper regulations and guidelines. Such uncertainty can discourage investors, as they are generally risk averse, and the lack of clear regulations can act as an invitation to fraudulent activity.
The highly publicized Coincheck hack earlier this year has been the prime example of why such a body is sorely needed. The JCEA will kick into gear working on increased customer protection and rules for internal control. Moreover, the organization will encourage compliance from the sixteen members, to the point that it may consider implementing potential penalties for any members that somehow undermine trust or public confidence for the industry.
Furthermore, the JCEA will also help more than a dozen cryptocurrency exchanges that currently are not licensed by the FSA, but continue to operate. This is in order to further the cryptocurrency industry as a whole. The JCEA will work with the core issue of ensuring that the blockchain and cryptocurrency industry is a healthy sector for both investments and development, furthering the future potential of the industry.
The announcement that more than a dozen cryptocurrency firms have banded together in Japan to further the industry as a whole comes as welcome news to cryptocurrency aficionados, especially that it is being done at least partially together with the FSA. The lack of official government guidance on ICOs, blockchain, and cryptocurrencies – in general – can be a source of concern for both investors and developers alike. Naturally, it remains to be seen what will ultimately come of this, but the willingness to regulate the industry is a positive signal for the Japanese cryptocurrency sector.
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Rasmus Pihl is a writer for Toshi Times by day and an avid follower of the cryptocurrency industry by night. Rasmus holds a Bachelor’s Degree in Marketing from the Gothenburg School of Business, Economics, and Law and runs a Swedish marketing consulting firm. Moreover, when he isn’t writing for Toshi Times, traveling, working or changing the world in some other capacity, Rasmus is more than likely caught up in postgraduate studies.