Japan’s New FSA Chief maintains stand for Stiff Crypto Regulation, positive on Digital Yen rollout

Japan's incoming FSA Chief hints on stiff crypto regulation but is open to discussions to rolling out a digital yen to speed up research on its CBDC.

By · Aug 10, 2020 . 5min read

Japanese digital Yen

Ryozo Himino, Japan’s incoming Financial Services Agency Chief cautions on the public expectancy of lax crypto rules hinting on stiff crypto regulation but is open to discussing rolling out a digital yen.

A Reuters report shows Himono is more focussed on Japan issuing central bank digital currencies (CBDC), amidst the coronavirus pandemic. Himono thinks the pandemic could help speed up the arrival of a cash-less society.

“Deregulating bitcoins and other cryptocurrencies may not necessarily promote technical innovation, if doing so simply increases speculative trading,”

Ryozo Himono, FSA Chief, Japan

In essence, Himono is enthusiastic about the Bank of Japan’s recent efforts to speed up research on its CBDC. As the head of the G20 group last year, Japan and others agreed to enact strict regulations to combat the threat of digital assets like Libra could pose.

Hence, Himono says

“We’re not thinking of taking special steps to promote cryptocurrencies,”

Ryozo Himono, FSA Chief, Japan

A very keen Himono thinks a proactive approach is best to solve any problem the proliferation of CBDCs could bring. Sharing his view, he said,

We shouldn’t be worrying about various challenges without even trying to design a plan (for issuing CBDCs). In the end, Japan must think really hard about whether to issue CBDCs because there are merits and demerits to doing so. What it can do now is to be ready so that when Japan decides to issue CBDCs, it can do so straight away,”

Moreover, most countries appear to be in a frantic race to create their own central bank-backed digital currency – CBDC. Apparently, China already finished developing its CBDC and is now in the testing phase.

Japan had earlier rolled out policies around crypto regulation but without emphasis on digital yen

Even though Japan’s earlier crypto regulation it released this year did not contain plans for a digital yen, it continues to adopt a clear regulatory stance the subject of cryptocurrencies. It released amendments to the Payment Services Act (PSA) and the Financial Instruments and Exchange Act (FIEA) in April. The country boasts of some of the most sophisticated crypto community with 23 regulated crypto exchanges and few others. In fact, the thought of inactive Japanese wallets becoming active recently signalled an imminent bull run.

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