Category Archives: Japan Cryptocurrency News

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Hana Financial Partners with Sumitomo Mitsui for Blockchain Partnership

Hana Financial Group and Japan’s Sumitomo Mitsui Trust Group have recently renewed their partnership and announced a joint blockchain based project to develop new digital business. The project is aimed to expand the ties in asset and trust management, according to the Seoul-based holding company, and was announced last Friday at the time of the fifth anniversary of their partnership at the Hana Global Campus in Incheon’s Cheongna International City.

The executives of both organizations revealed the collaboration plans for the development of the infrastructure, global aviation financing, and human resource exchange. Hana group’s subsidiary, KEB Hana Bank, forged a strategic alliance with the Dutch company Arena Aviation Capital to facilitate commercial aircraft leasing and financing using blockchain, where the companies are now looking to launch these services in Japan.

In addition, Sumitomo Mitsui Trust will collaborate with Hana Financial to launch the Global Loyalty Network (GLN) digital platform in Japan by the end of this year, which will allow customers to perform digital transactions from anywhere around the globe by leveraging the decentralized blockchain system.

The system forms a global alliance of GLN across industries and allows access to robust local networks and infrastructure through blockchain based GLN. The users share benefits such as instant access to locally offered deals and discount offers worldwide while the system also enables the payment, transfer, exchange, redemption, and earnings of digital assets across borders.

Along with KEB Hana Bank, Hana Financial Investment has also pitched in the Hana-Sumitomo Mitsui alliance, with the Hana Financial Chairman Kim Jung-tai stating, “We will further use each other’s strength to expand our global reach.”

The partnership between the two financial groups began in December 2014 after their first agreement in investment banking. In February 2018, the conglomerates further strengthened the ties by creating a partnership to collaborate in financial technology and real estate investment management.

 

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Japan Central Bank Examines Digital Currencies Again

Japan Central Bank Examines Digital Currencies Again

The role of central bank digital currencies (CBDCs) in the present monetary system is being re-examined by the Bank of Japan (BoJ). The central bank summarized the findings in a comprehensive report published after previous negative opinion of CBDCs by the bank last year.

In the said report, BoJ mentioned various approaches to implement a CBDC. Moreover, probable outcomes of each approach have been discussed in detail. The bank has divided possible CBDCs into two categories. One will be accessible to the general public like banknotes, while the other will be limited to large-value settlements only.

The said categorization has been done in accordance with the report that was published in March 2018 by the Bank for International Settlements, which divided CBDCs into wholesale and general purpose ones.

The report’s authors noted that wholesale CBDCs are not expected to bring any new feature to the existing monetary system. Therefore, the focus must be shifted to the general purpose currencies. The major portion of the report deals with general purpose CBDCs. For token-based ones, blockchain and distributed ledger technology can be utilized, stated the report.

Masayoshi Amamiya, deputy governor of BoJ, holds a negative opinion regarding central bank-issued cryptocurrencies. The South Korean central bank also stated that it will not issue any central bank digital currency.

 

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Japan Financial Regulator Requested to Reduce Crypto Tax by Economic Alliance

Japan

Japan’s Financial Services Agency (FSA) has been requested by the Association of New Economy (JANE) to reduce the current tax rate for crypto-related income, media reported on 14 February 2019.

In a proposal request, it has been suggested to the FSA to impose progressive taxation on crypto instead of general taxation, noted media report. The initiative was led by Rakuten’s CEO, Hiroshi Mikitani.

According to the said proposal, a progressive tax is currently applied to forex and stock markets in Japan. The tax rate, under progressive taxation scheme, is 20 percent. However, the crypto sector is taxed according to the general taxation system, which is 55 percent. The aim of this request is to bring down the tax rate from 50% to 20% on crypto gains. Moreover, the association has proposed that no tax should be imposed on crypto-to-crypto transactions by FSA.

In addition, JANE appealed to the Japanese regulator to avoid hindering the growth of the crypto sector. It maintained that restrictive regulations on digital assets will likely harm innovation. Furthermore, the association demanded a clarification from FSA regarding the settlement process of initial coin offering, derivative trading and its regulatory scope.

Recently, Rakuten (Japanese version of Amazon) declared that it will revise its corporate structure. The company aims to utilize blockchain technology for setting up a new payments subsidiary system. Moreover, its loyalty branch, Spotlight Inc., will be rebranded to a new firm named as Rakuten Payment. A crypto exchange will also be operated by Rakuten Payment.

On the other hand, FSA recently (12 January) announced that within the next six months, the review process of crypto-related businesses licenses will either be rejected or approved.

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Japan Regulator Denies ETF Rumors

Japan

Japan regulator Financial Services Agency (FSA) has denied rumors that it is considering the option of Bitcoin exchange-traded funds (ETFs).

The denial comes after the report by Bloomberg from an anonymous source that claims FSA was mulling on the acceptance of Bitcoin ETFs. The agency has categorically denied that fact, saying, “At this moment, we are not exploring an approval of ETFs based on crypto assets.”

The FSA was also reported to be considering the creation of a new legal category for cryptocurrencies, called crypto assets. Through the single name change from currency to assets, the report said the government “hopes that traders will no longer purchase [cryptocurrencies] believing that they are legal tender recognized by the government”.

Japan is one the most progressive countries when it comes to cryptocurrency. Yet, the Asian nation is ensuring that there is no misleading information or perception on the nature of cryptocurrencies. The FSA is very active in this regard and has made a number of regulations and given rulings. In October last year, it had declared that stable coins were not a form of cryptocurrencies, but just a form of prepaid payment instruments. This definition put stable coins in a whole different category and standard payment instrument applied to them.

In December, the agency also set out a new set of rules for companies wishing to run and ICO, in order to protect the rights of investors. This would require proper registration and approval from the regulator first.

The country also has a crypto exchange regulating body, the Japanese Virtual Currency Exchange Association (JVCA). It is primarily a self-regulating group that sets standards for industry-wide investors.

 

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Japan May Regulate Unregistered Crypto Investments

Japan

The Financial Service Agency (FSA) of Japan is reportedly looking to crack down on unregistered crypto investment firms and bring them under the Financial Instruments and Exchange Act. Tentative dates for the aforementioned action have not been announced yet.

It stems from a legal loophole which allows unregistered investment firms to collect funds in cryptocurrencies rather than cash, an oversight the FSA is keen to rectify.

The issue became a highlight due to the increased number of crypto pyramid schemes being unearthed in Japan. Tokyo Police in November arrested eight men over the charges of collecting of JPY 7.8 billion (USD 69 million) in cryptocurrency using such schemes. A major chunk of the funds collected was in Bitcoin, whereas only JPY 500 million (USD 4.4 million) was collected in the form of cash. Officials claimed that the scam would not have come to their notice had the culprits only used cryptocurrency.

The FSA has kept a close eye on crypto-related businesses and firms since the collapse of the Mt Gox exchange back in 2014. The agency regulated crypto exchanges by introducing a licensing scheme and conducting inspections of the exchanges for their security and compliance with anti-money laundering laws.

Recently, reports surfaced that the FSA was looking to allow crypto exchange-traded funds (ETFs). However, over the concerns of enhanced speculations, it has now refused to allow the trading of crypto derivatives on financial exchanges.

 

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5 New Crypto Exchanges Join Japanese Self Regulatory Body

5 New Crypto Exchanges Join Japanese Self Regulatory Body

The Japanese Virtual Currency Exchange Association (JVCEA) has recently welcomed five new members into the fold.

The JVCEA was founded on April 2018 when 16 crypto exchanges joined hands with the ultimate aim of providing self-regulatory standards for the industry-wide investors. Later in October, it was officially given self-regulatory status by Japan’s financial regulator to supervise the crypto sector.

As a result of a USD 534 million hack of a crypto exchange (Coincheck) back in January 2018, the body issued comprehensive regulatory guidelines to mitigate any future hacks. These regulations banned insider trading and prohibited the trading of privacy-based coins.

The new companies joining JVCEA are: Coinage Corporation, Everyone’s Bitcoin, LVC Corporation, Lastroots Inc. and Coincheck. These companies are classified as Type II by the body, which means that these companies are still in the process of obtaining the virtual currency trader registration.

Reportedly, JVCEA is only recruiting Type II members at the moment. However, it is planning to add a classification for the wallet creators in the near future as well. On the other hand, the exchange association claimed that it is looking to put a margin trading limit along with the maximum restrictions to be placed by the exchanges on their clients’ trading.

 

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Japan Implementing ICO Regulations to Protect Investors

Japan, FSA, cryptocurrency, regulations

The financial regulator of Japan is going to introduce a new set of regulations for ICOs, aiming to protect the funds of investors. This was reported by Jiji Press, a local news outlet.

The news outlet reported that organizations and companies wishing to execute ICOs will need to register with Japan’s Financial Services Agency (FSA). This comes at a time when FSA is rumored to introduce bills that would see exchanges, payment services, and various financial instruments have their regulations redefined.

Jiji reported that the regulations come “in view of a number of possibly fraudulent ICO cases abroad” and they would help “limit individuals’ investment in ICOs for better protecting them.

Last month, FSA’s Study Group on Virtual Currency Exchange Industry concluded its tenth meeting. The group has classified tokens according to three categories: virtual currencies that do not have an issuer (like BTC), virtual currency that does have an issuer, and virtual currency that not only has an issuer but also distributes profits.

The first two categories of tokens come under settlement regulations of Financial Instrument and Exchange Act, while the third type is subject to investment regulations of the same act.

In recent times, Japan has introduced a number of regulations in the crypto space. Back in September, the FSA had implemented screening procedures to make sure exchanges were properly conducting risk management. It had also declared in October that stable coins were a form of prepaid payment instruments and were not subject to same regulatory scrutiny that cryptocurrencies were subject to. The FSA is systematically regulating the whole crypto sphere within the country. It has even imposed regulations on crypto wallet service providers.

All of the moves, although seeming to throttle the crypto industry, are actually bringing in due diligence and anti-fraud measurements.

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Mitsubishi UFJ Signs MoU with Brazil Bank for Ripple-Based International Payments

Japanese banking corporation Mitsubishi UFJ Financial Group (MUFJ) Inc has announced that it has struck a partnership with Brazilian bank Banco Bradesco for a new Ripple-based cross-border payments system.

According to an official press release from the Japanese bank, the new partnership will be based in Brazil itself with the local subsidiary of the bank Banco MUFJ Brasil involved in the partnership with Banco Bradesco.

MUFJ has recently invested a lot in cryptocurrency and blockchain-based systems, including being a party to a blockchain-based syndicated loan organized by Spanish bank BBVA. Now MUFJ has reiterated its confidence in the Ripple’s XRP cryptocurrency after joining its payments steering group back in March 2017.

According to the press release: “The new payment system… will assist the banks as they work toward commercializing a high-speed, transparent and traceable cross-border payments solution between Japan and Brazil.”

While Ripple has been criticized for its centralized approach and other issues, it is gaining traction for the last few months and has seen the price of XRP shoot up significantly from early year’s lows. Various other banks are also in talks with Ripple for adopting its token in cross-border payments systems but nothing concrete has yet been achieved.

Brazil, on the other hand, is seeing increased activity in the blockchain and cryptocurrency sector as the new president Jair Bolsanaro has announced support for the sector. While the financial regulators are running a tight ship when it comes to making regulations, so far, overreach has been largely avoided.

 

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Bank of Japan Declares State-Issued Cryptocurrencies Are Not Effective Economic Tools

Japanese Central Bank’s current deputy governor Masayoshi Amamiya has once again voiced opposition towards Central Bank issued Cryptocurrencies (CBDCs) in a recent interview with the New York Times.

During a meeting in Nagoya, Japan, Amamiya expressed his doubts about the CBDCs and said that such currencies are unlikely to improve the existing monetary systems and therefore, Bank of Japan itself has no plan to issue digital currencies.

While some experts have considered the CBDCs a tool to control the economy once the interest rate falls to zero, Amamiya has questioned their theory. He is of the opinion that in order for the concept to work, fiat money would have to be eliminated from the financial system in the first place. If the fiat money is not discontinued, then the CBDC will continue to be converted into cash for various reasons and thus the CBDC will be under pressure.

Amamiya said:

“In order for central banks to overcome the zero lower bound on nominal interest rates, they would need to get rid of cash from society.”

While a cashless future is touted by many as the future of payments around the world, according to Amamiya, even a progressive country like Japan is not ready for the elimination of fiat currency as cash is still a popular means of payment. He also believes that the shift from fiat currencies to CBDCs is quite a big hurdle to overcome for the central bank because crypto assets are still not considered as a stable means of payment.

While Amamiya may be negating reports of state cryptocurrencies, it is worth mentioning that Japan is one of the most progressive countries in the world regarding technology and cryptocurrency adoption. If CBDCs are eventually proved to be stable, then it is countries like Japan that are likely to adopt them first.

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Japanese Crypto Association Tightens Self-Regulatory Measures

A Japanese self-regulatory body of cryptocurrency exchanges has tightened laws on customer asset management, according to Japan Times. According to sources within the the Japanese Virtual Currency Exchange Association (JVCEA), the group consisting of some of the largest cryptocurrency exchanges operating in the country has established a limit on the amount of digital currencies and tokens that can be managed online to deter future hacking attempts. The exchange association was established in April in an attempt to self-regulate the cryptocurrency exchange landscape.

The move comes after yet another cryptocurrency exchange was hacked in Japan last week. Zaif, the affected exchange lost more than USD 59.7 million worth of cryptocurrencies because of this hack and the tokens were reportedly stored in its hot wallet.

The JVCEA is attempting to limit the risk of hacks by pushing exchanges to keep most of their coins offline in cold storage wallets, with only up to 10-20% of the total customer holdings to be allowed in the hot wallet from which transactions can be made automatically.

The move is swift and pre-emptive because any news of the financial watchdog Financial Services Agency (FSA) will affect all of these exchanges and their operations. The JVCEA believes that self-regulation is important for the future because government interference negatively affects the cryptocurrency circles. It remains to be seen how the FSA will react due to the recent hacking episode in the Asian country, although it has made apparent its frustrations in the case of Zaif.

Japan is one of the most progressive countries in adopting cryptocurrencies and blockchain technology but it also has been the target of some of the biggest hacks in history with the USD 523 million worth of NEM tokens being stolen from CoinCheck exchange earlier this year.

 

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