The new commissioner of Japan’s Financial Services Agency (FSA), Junichi Nakajima, believes the country needs to think carefully before making Bitcoin (BTC) and other cryptocurrencies more accessible to the general public.
Nakajima believes crypto assets like Bitcoin have the potential to benefit the public as a quick and cheap way to transfer money, he said in an interview with Bloomberg. However, most of the crypto assets are currently used for speculation and investment instead.
That’s why the Japanese regulator believes careful consideration is required before making it easier for the general public to invest in crypto assets. Nakajima said that the high volatility of crypto markets due to not having underlying assets is a primary reason for the Japanese regulator not to allow crypto investment trusts.
Japan has been ramping up its regulatory efforts following the infamous hack attack on Tokyo-based crypto exchange Coincheck, which resulted in the loss of 523 million NEM, worth approximately $534 million.
Since then, the country has become a difficult market in which to do business for registered crypto exchanges, Nakajima admitted. The current regulatory framework on crypto exchanges effectively protects customers and meets Anti-Money Laundering requirements. But the business situation of most of the registered crypto exchanges “is rather rough,” Nakajima added.
The Japanese government is aiming for global cooperation to regulate digital currencies. To this end, the Japanese Ministry of Finance is reportedly seeking to increase its staff. The FSA also established a new unit last month to monitor broader crypto markets and focus on decentralized finance.
Major crypto exchanges such as Binance and Bybit are not among Japan’s 31 registered crypto exchanges. The FSA issued a formal warning letter to Bybit in May and Binance in June, accusing them of offering crypto exchange services in the country without registration.