Japan’s Financial Services Agency (FSA) is proposing a new business category for enterprises dealing with stablecoins and virtual assets. Under the new system, “intermediary” or “brokerage” businesses involved with crypto and stablecoins could face less stringent legal requirements than is currently the case, where they are forced to register as crypto exchanges.
According to a Nov. 21st report from Nikkei, and video footage of a meeting, Japan’s FSA could be removing restrictions for businesses that wish to deal with stablecoins and crypto. Currently, even businesses acting as intermediaries must technically adhere to strict guidelines (according to law) and register as cryptocurrency exchange services with the Japanese government.
The new proposal, discussed at a working meeting of the Financial System Council on Thursday, could remove this restriction, allowing “intermediary” or “brokerage” businesses to function with less pressure, but under the supervision of registered exchanges which will assume liability.
Legal requirements for dealing with crypto to shift to exchanges
The tentative name of the category (translated from Japanese) is: “cryptocurrency and electronic payment means brokerage business.” Registering as an official virtual asset exchange with the Japanese state is a circus of red tape (and often rejection) so the news may come as a bullish boon to some business owners.
Intermediary businesses won’t take custody or directly manage assets, but could act as a bridge between customers and registered exchanges, allowing, for example, the use of virtual currencies in games to purchase NFTs (non-fungible tokens) instead of relying of prepaid methods.
The meeting materials specified:
“When game companies, telecommunications companies, or other businesses with a wide customer base act as intermediaries for transactions of crypto assets … between crypto asset exchanges … and users in the game apps or unhosted wallets that they provide, depending on the nature of the transaction, this may constitute ‘intermediation’ under the Payment Services Act.”
Of course, the perceived “lighter regulations” will only be felt as a result of shifting AML/CFT (anti-money laundering/counter-financing of terrorism) regulations to registered exchanges only, with the ecosystem as a whole still being under the control of the Japanese state.
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