Japan’s Financial Services Agency (FSA) may put bitcoin and other cryptocurrencies under a single category “crypto-assets”. The action is aimed by the government in hopes that “traders will no longer purchase them believing that they are legal tender recognized by the government.”
A report from the Japan News, that refers to a report from the Yomiuri Shimbun, states that an advisory panel, brought to FSA’s notice last week that the term “virtual currency” could be misleading, and urged a change of the term. Hence, the agency will revise relevant laws and regulations, such as the Payment Services Law, which stipulates the use of virtual currencies. The panel’s report also highlights the need to establish a mechanism to protect cryptocurrency users in the event of cash outflows.
The Payment Services Act of Japan was revised in April 2017, to mandate all cryptocurrency exchange operators to register with FSA. In doing so the act recognized bitcoin as a means of payment in the country. However, in August 2018, The Japan Times quoted an FSA official, who said that virtual currencies are outside the Financial Instruments and Exchange Act, adding that trading in them is “unchecked.”
The FSA is considering the suggested change as per the panel’s report, in order to implement strict regulation and management systems by the companies engaged in the crypto space. Earlier this year, finance ministers and central bank governors of the Group of 20 major economies agreed that cryptocurrencies “lack the key attributes of sovereign currencies,” and used the term “crypto-assets” to describe them.