Japan Approves 11 Bitcoin Exchanges In Regulatory Framework
Japan’s Financial Services Agency (FSA) has granted regulatory approval to 11 domestic virtual currency exchanges, making them the first to be allowed to operate under the country’s new financial services regulations.
The list of companies includes bitFlyer, QUOINE, Bit Bank Corporation, SBI Virtual Currencies, Bit Trade, BTC Box, Bit point Japan, Fiscal Virtual Currency Exchange, and Tech Bureau.
The exchanges were required to register with the FSA to comply with new legislation passed earlier this year. Under the new law, bitcoin is recognized as a legal payment method and virtual currency exchange are subject to increased security guidelines, including segregating funds in customer accounts, verifying customer identities to combat money-laundering, and having adequate systems and policies in place to prevent cyber attacks. Japanese exchanges also have to maintain capital reserves of at least 10 million yen, and provide certain protections for client funds.
Registered exchanges will undergo regular on-site inspections by the financial watchdog and be ordered to improve if operations are deemed inadequate. But officials sought to keep registration requirements to the bare minimum, worrying that too many strictures could stunt private-sector innovation and market growth potential. Even exchanges that did not make the first round of registrations will be able to continue operating from October onward.
BitFlyer CEO Yuzo Kano said that being among the first to obtain Japan’s Virtual Currency Exchange license was the result of over a year of work with the FSA and bitFlyer.
“We appreciate the FSA for implementing a framework that ensures strong consumer protection while cultivating innovation among new businesses, such as bitFlyer,” said Kano.
Kano added that the implementation of this new legal framework cements Japan’s position as the epicenter for bitcoin, and bitFlyer’s role as the leading licensed exchange.
Quoine issued a statement saying they will continue to work with regulators to promote the healthy development of the cryptocurrency industry within Japan.
Quoine CEO Mike Kayamori said that FSA licensure is a positive market signal that they are here to build a trusted exchange, with proper compliance measures in place to prevent security breaches and provide more asset protection for their customers.