Six of Japan’s leading financial firms have come together to form a blockchain association aimed at policing the domestic security token landscape. South Korean Bithumb is courting the Indian government to reconsider its regulatory position on crypto. Monex Group, the financial giant that rescued Coincheck exchange after falling victim to a massive hack, has applied to become part of the Libra Association despite other firms such as Mastercard and Visa reconsidering their position and role in the Swiss-based organization.
Central Bank Digital Currency (CBDC) fever grips Asia
Asian countries are slowly coming out of their shell to participate in the creation of digital currencies. However, it seems that those that are doing so are being pushed by something else beyond just innovation.
First, it was China, a crypto-hostile nation that began its look into cryptocurrencies some years ago but only accelerated the project after Facebook made public its plans to create a digital currency for the emerging markets.
And before long, North Korea announced that it is in the early stages of developing its own national cryptocurrency. Many experts believe that Korea’s decision is motivated by the need to circumvent US sanctions.
Korea is not alone in this and will likely be backed by countries such as Venezuela, Iran, and Russia.
Japanese financial regulator is not sold on crypto trusts
Japan may soon sideline crypto trusts, according to a press release published by the Japan Services Agency (FSA). The regulator, which currently oversees the country’s cryptocurrency exchanges and related business, has updated its guidelines on financial instruments.
“It appears that financial products that involve investments in [cryptocurrencies] will be created in the future, but there are also indications that investment in [cryptocurrencies] would encourage speculation. The FSA believes that it should carefully handle the sale of investment trusts that invest in such assets,” the agency wrote.
An accompanying document stated that the FSA could deem trusts investing in cryptocurrencies as “inappropriate” simply because investment trusts are supposed to invest only in certain specific assets. This is in contradiction to the FSA’s ruling that regards cryptocurrencies as non-specific assets.
Japan’s 6 Major firms form a Security Token Offering Association
The cryptocurrency space in Japan is moving towards legitimacy after six of the country’s major financial institutions came together to form the Japan Security Token Association. SBI Securities will lead the association which comprises of online giant Rakuten, brokerage houses Daiwa and Nomura, and Monex Group, the firm that bought Coincheck less than four months after it lost more than $500 million in a hack in January 2018.
The association wants to police the issuing of blockchain-based digital securities. This is a slight indication that blockchain has the potential to improve business processes.
The wider blockchain community in the crypto space wants nothing more than the legitimacy of the industry. Major players are now in favor of blockchain technology, giving it the much-needed push to become an important tool for businesses.
Facebook’s recent foray into crypto boosted the industry and Go Masuda, the chairman of the newly formed association believes that the move by the social media giant might be a turning point for the industry.
“The industry lacked a good use case of blockchain technology. There have been no killer apps since bitcoin [emerged],” said Masuda.
Monex eyes membership of Facebook’s Libra Association
The financial giant Monex Group has tendered its application to be part of the Libra Association, a Swiss-based non-profit organization tasked with the governance of the Libra ecosystem. There is no word on the status of the application so far, but what matters to some people is that a major financial company is interested in being part of the association.
Monex’s application comes after several financial giants, Visa, Stripe, PayPal, and Mastercard, have reportedly expressed an interest in pulling out of the Libra Association. The fall out is attributed to Facebook’s strained relationship with regulators.
Japan’s crypto self-regulatory body implements new IEO regulation
The Virtual Currency Exchange Association (JVCEA), a Japanese body granted licenses by the FSA to police domestic crypto space, has issued new guidelines to govern cryptocurrency businesses.
The new guidelines, set out in a document titled “Guidelines on Regulations Pertaining to the Sale of New Cryptocurrencies”, is expected to impact how initial coin offerings and initial coin offerings operate in Japan.
The JVCEA members include all cryptocurrency exchanges that have been approved by the FSA, the country’s financial watchdog. In June this year, the FSA published a set of guidelines for exchanges.
The ICO industry has significantly declined in recent months mainly due to scam projects and the long-arm of regulators probing a number of ICO projects. The trend is now shifting to initial exchange offerings and security token offerings.
Bithumb Global engages with the Indian government to set up shop in the country
India is in the crypto media for its proposal to ban cryptocurrency activities such as trading and heavily punish those caught on the right side of the law. While the local crypto startups have been pleading with the government to adopt a more friendly-stance with little to no luck, it seems that hope now rests with Bithumb Global, a South Korean firm engaging the Indian government on how to regulate digital assets in the country.
Bithumb is one of the leading exchanges in the world and is currently planning to expand to the Indian market. According to the exchange’s co-founder Javier Sim, the exchange only operates in regulated jurisdictions.
“We are open to talking to regulators, working with them to be a regulated exchange. We are a strong brand from Korea and do not involve ourselves in unregulated or illegal trade,” said Sim.
Binance partners with analytics firm to comply with FATF guidelines
Leading cryptocurrency exchange Binance has partnered with Coinfirm, an analytics firm in an effort to strengthen its anti-money laundering (AML) compliance strategy. The partnership is meant for Binance to comply with the Financial Action Task Force (FATF) rules that require exchanges to identify the people or organizations involved in crypto trades.
The FATF guidelines, which are meant to curb illicit activities, will see Binance analyzing more than 1,200 digital currencies offered on its platform.
The new FATF guidelines have shaken up the crypto industry with privacy coins being hit hardest by the new rules.
Coinbase’s chief compliance officer Jeff Horowitz said that FATF’S heavy-handedness will lead to more direct transactions, leading to less transparency.
“I get why the FATF wants to do this. But applying bank regulations to this industry could drive more people to conduct person-to-person transactions, which would result in less transparency for law enforcement,” said Horowitz.