Eleven digital currency companies in Japan have been granted a Virtual Currency Exchange license...
Japan's Financial Services Agency has formally approved operational licenses for eleven virtual currency trading companies. The list includes industry players bitFlyer, Quoine, Tech Bureau, Bit Bank, SBI Virtual Currencies, and GMO Coin. According to official statements released today, the FSA is continuing its evaluation of seventeen additional applications.
Beginning April 1, 2017, any digital currency platform seeking to provide exchange services in Japan must obtain formal registration through the FSA. The regulator has established stringent prerequisites for approval, encompassing adequate consumer safeguards, robust operational controls, cybersecurity protocols, proper segregation of customer funds, and comprehensive customer identification verification.
This regulatory milestone occurs as several Asian economies implement stricter cryptocurrency policies. China announced an ICO prohibition this month and mandated the closure of virtual currency exchanges. In South Korea, the financial authority issued a statement regarding plans to ban all blockchain-based fundraising initiatives, including token sales, characterizing such offerings as speculative and contrary to capital market regulations. South Korean officials promised intensive oversight with significant consequences for parties participating in ICO activities. Margin-based trading in cryptocurrencies was also designated for prohibition.
Japan has witnessed substantial expansion in cryptocurrency commerce throughout 2017. Japanese yen-denominated bitcoin trading represents approximately 48% of worldwide trading volume, data from Cryptocompare indicates.
bitFlyer, operating as Japan's leading bitcoin trading platform by trading volume, noted that the new licensing framework will enable expansion of its customer base, which currently stands at 800,000 users. The platform processes approximately US$13 billion in monthly trading activity.
Yuzo Kano, chief executive of bitFlyer, offered this perspective: "Japan has been exploding with demand for both bitcoin trading as well as virtual currency services. The implementation of this new legal framework cements Japan's position as the epicenter for Bitcoin. We appreciate the FSA for implementing a framework that ensures strong consumer protection while cultivating innovation among new businesses."
