- The self-regulation experiment in Japan is not working properly
- The current crypto model is highly fluctuating
The local government and industry experts have claimed that the self-regulation experiment in Japan seems to have failed.
A self-regulatory body of Japan, the Japan Virtual Currency Exchange Association, has been associated with creating and enforcing the rules and regulations for cryptocurrency exchanges in the country since 2018. Many experts believe the body to withstand the crypto industry rather than a government body.
On July 18, a person who knows both the crypto industry and government very well (asked not to disclose the name) gave an interview to the Financial Times and kept his point on the current model of crypto regulation. He said,
“Many people have suggested to the country that the self-regulation experiment of the crypto industry will not work. Unluckily, the suggestion has turned out to be correct.” The current model of crypto regulation is also highly fluctuating.
Another person like the aforementioned, who is close to JVCEA, has claimed that the body needs staff with a piece of good knowledge and interest in crypto because the system lacks it.
He said, “ The office has staff like retired bankers, brokers, and government workers but does not have people who know the field. This is the reason for the management not working properly.”
Japan’s Financial Services Agency has the power to pass and impose the policy framework on the local cryptocurrency exchanges. Some of the top local cryptocurrencies are Coincheck, Bitflyer, Rakuten Wallet Co, and the Japanese branch of FTX and Coinbase.
According to the financial times, the Financial Services Agency has pointed out several issues with the Japan Virtual Currency Exchange Association for delaying launching the anti-money laundering (AML) law. Also, it needs good communication between its workers like directors and the member operators. It also lacks good management.
Financial Services Ability has already warned the JVCEA on an extremely serious note in December to maintain its operations because earlier, it was not clear about the roles and responsibilities of board members, the process of management, and the thought process of the company.
Because of the warning from FSA, JVCEA has improved its digital assets listing criteria. The organization was asked to assess tokens that the local bodies plan to list. JCVEA almost took six months to complete the whole screening process.