Nobuchika Mori, Japan’s longest-serving regulator and chief of Japan’s Financial Services Agency (FSA) who is responsible for most of the crypto regulations imposed by the Japanese government, is expected to leave this summer, according to FT.
For many years, with strict capital controls and money laundering policies, Japan has always been known as a conservative region regarding policies pertaining to the finance sector and emerging markets. Traditionally, the Japanese authorities preferred not to take any risk in legitimizing new asset classes and emerging markets to ensure a platform is not provided to criminals, money launderers, and crime syndicates.
However, the conservative regulatory approach towards the finance sector and emerging markets inevitably led Japan to drift off from the forefront of technological development and innovation. Consequently, Mori established a new and a more aggressive strategy to welcome emerging markets, new technologies, and asset classes.
Leo Lewis, a Tokyo Correspondent for FT and a financial analyst based in Japan, emphasized that in recent years, starting with Japan’s integration of a national licensing program for crypto exchanges, Mori and his team of regulators have focused on implementing policies that can create a better ecosystem for startups and innovative fintech companies.
“Mr Mori knew, intimately, that Japan’s financial sector had fallen behind in IT, fintech, blockchain and its general embrace of the digital. Faced with an exciting, emerging genre that had already captured the imagination of the Japanese public, it must have been tempting to overlay on to crypto a load of pre-existing national ambitions centered on tech start-ups, fintech and encouraging more retail cash to flow around the system,” Lewis explained.
The admittance of Mori that Japan has fallen behind neighboring countries like China and South Korea in the technology, fintech, and cryptocurrency industries primarily due to overly strict and impractical regulations guided the Financial Services Agency (FSA) and other local financial agencies to overhaul existing regulatory frameworks and create new policies to embrace startups.
The forward-thinking approach of Mori and the rest of the FSA allowed Japan to eventually evolve into the largest crypto exchange market in the world, easily surpassing the US and South Korea. According to CryptoCompare, the Japanese market accounts for more than 62 percent of global bitcoin trades, nearly three-fold larger than the US.
The data shown above obtained from CryptoCompare is cryptocurrency market data as of June 28, subsequent to the $500 million hacking attack suffered by Coincheck, formerly Japan’s biggest cryptocurrency exchange. Even after the largest security breach in the history of the cryptocurrency industry, Japan has still been able to remain as a dominant force within the cryptocurrency market.
Mori’s strong presence in the Japanese finance sector and Japan’s influence over the global cryptocurrency sector have affected various major cryptocurrency markets including the US and South Korea. This week, the South Korean financial authorities have drafted a new guideline for money laundering prevention targeted at crypto exchanges, based on the efforts of the Japanese government in cracking down money laundering activities by crime syndicates.
Featured image from Shutterstock.
Last modified: March 4, 2021 5:09 PM