The Japanese government has approved stricter laws and regulations regarding crypto assets, which include the “Travel Rule” proposed by the Financial Action Task Force (FATF) to combat money laundering and illegal actions. These regulations came into effect on June 1, and they require sending crypto providers to collect and communicate information about the originator and recipient for transactions above a certain asset value.
Meeting International Standards
The G7 Finance Ministers meeting in Japan discussed the Travel Rule in mid-May, and this decision aims to bring Japan’s legal framework in line with international standards for crypto asset regulation. Virtual currencies have a decentralized management system, and while some countries have adopted them as legal tender, others have developed their legal frameworks, including regulations.
Georgian Central Bank to Launch AML Probe
In Georgia, the National Bank of Georgia (NBG) will supervise virtual asset service providers (VASPs) from September 1, 2023, to address anti-money laundering. Japan, on the other hand, has not had strict regulations for cryptocurrencies in practice, and the citizens generally favor anonymity in the digital space. As a result, cryptocurrencies have developed a certain position in the country, with bookmakers allowing deposits in cryptocurrencies.
bitFlyer Implements TRUST
Japan’s leading crypto asset exchange, bitFlyer, announced on May 30 that all deposits and transfers of crypto assets by corporate and individual customers made via bitFlyer will be made available only through crypto exchange that have implemented TRUST (Travel Rule Universal Solution Technology), a system that complies with the Travel Rules. However, this restriction is limited to 21 countries and regions that are required to notify information based on the Travel Rules.
Conclusion
Japan’s approval of stricter regulations for crypto assets is a positive move towards international standards for regulation. The Travel Rule is intended to combat money laundering and illegal actions associated with virtual currencies. While cryptocurrencies may offer anonymity in the digital space, bookmakers and crypto exchanges have implemented KYC policies to comply with regulatory requirements.
