Japan's House of Representatives Approves New Crypto Asset Bill
On May 21, Japan's House of Representatives formally passed a new cryptocurrency bill. The following day, the House of Councillors accepted the bill.
Drafted by Japan's Financial Services Agency (FSA), the legislation is officially titled "The Draft Bill to Amend Parts of the Act on Fund Settlement, etc., to Respond to the Diversification of Financial Transactions Accompanying the Advancement of Information and Communication Technology." It seeks to modify two key laws applicable to crypto assets: the Act on Fund Settlement and the Financial Instruments and Exchange Act.
Lawmakers' Key Requirements
The amended bill includes a 15-point resolution that mandates the government to:
- Clarify regulatory objectives
- Deploy appropriate personnel
- Align regulations with international standards
- Develop tax collection methodologies
- Establish effective inspection and supervision systems for user protection
The resolution emphasizes avoiding over-regulation while ensuring proper responses to emerging technologies like ICOs (Initial Coin Offerings). It also recognizes crypto assets' potential to contribute to Japan's industrial development.
Impact on Crypto Exchange Operators
Japan currently has:
- ✅ 19 licensed cryptocurrency exchanges
- ⏳ 140+ companies expressing interest in entering the market
The FSA confirmed:
"Registered crypto asset brokers won’t need re-registration but must develop systems to comply with new obligations under this amended bill."
👉 Explore how Japan's regulations compare globally
Key Areas Addressed by the Bill
- Terminology Update: "Virtual currencies" renamed to "crypto assets"
- Storage Requirements: Mandatory use of cold wallets for client assets
- ICO Regulations: Recognition of income distribution rights
- Advertising Restrictions: Prohibition of speculative ads and false labeling
- Asset Notification: Exchanges must declare handled cryptocurrencies and notify changes in advance
- Self-Regulatory Collaboration: Emphasis on cooperation with approved organizations
- Margin Trading: Regulation under the Financial Instruments and Exchange Act (80% of domestic crypto transactions)
FAQ Section
Q: When will the new regulations take effect?
A: The bill is expected to be finalized by June 2020, with phased implementation.
Q: How does this affect existing crypto exchanges?
A: Licensed exchanges must adapt their systems but won’t lose their licenses.
Q: What’s the penalty for non-compliance?
A: The FSA will enforce penalties ranging from fines to license revocation for severe violations.
👉 Learn about compliant crypto trading in Japan
Conclusion
This legislation balances innovation with investor protection, positioning Japan as a leader in crypto regulation. By addressing storage practices, ICOs, and advertising, the FSA aims to reduce risks while fostering industry growth.
Sources: FSA official documents, Impress Media, news.Bitcoin.com