The US government may follow the roadmap of Japan in regulating trading activities around cryptocurrencies such as bitcoin and Ethereum.
Last week, the Japanese government and its financial regulator the Financial Services Agency (FSA) officially authorized and licensed 11 cryptocurrency exchanges including BitFlyer, the country’s largest trading platform with over 800,000 users.
In a statement, Yuzo Kano, the CEO at BitFlyer, emphasized that the establishment of practical regulations for cryptocurrency exchanges and investors by the Japanese government would allow the country’s cryptocurrency market to position itself at the epicenter of global cryptocurrency trading, development, and innovation.
“Japan has been exploding with demand for both bitcoin trading as well as virtual currency services. The FSA’s approval for bitFlyer to operate as a Registered Virtual Currency Exchange, and the agency’s openness and forward thinking regulation could not come at a better time for the blockchain space,” said Kano.
Governments Can Either Do Nothing or Create a Fair Ecosystem For Exchanges
Earlier this year, at the Blockchain NZ conference held in Auckland, New Zealand, bitcoin and security expert Andreas Antonopoulos explained that governments can either leave the cryptocurrency exchange sector as is or create a more transparent, fair, and efficient environment for businesses.
“Governments can choose to either do nothing – which is okay; make things worse for cryptocurrency trading – like what Australia did by imposing sales taxes on all cryptocurrency transactions; or they can make things easier for companies by reining in the banks and encouraging companies by creating a level playing field,” said Antonopoulos.
By authorizing and licensing cryptocurrency exchanges, the Japanese government has officially recognized cryptocurrency exchanges as regulated financial service providers, allowing the companies to fully operate as legal financial companies within the country. Already, within less than a week, the optimistic approach from Japan’s FSA in regulating cryptocurrency markets has triggered an increase in demand toward bitcoin and as a result, the daily trading volume of Japan, the largest bitcoin exchange market in the world, has risen at a rapid rate. The growing demand toward bitcoin is also evident in the price trend of bitcoin, as the bitcoin price surpassed the $4,470 mark earlier today, on October 2.
The US Government May Follow Japan in Licensing Exchanges
At an event hosted by the Federal Reserve Bank of Philadelphia, acting Comptroller of the Currency Keith Noreika told reporters that he is open toward cryptocurrency exchanges applying for bank status. Noreika also noted that he is considering the imposition of a nationwide licensing program for cryptocurrency exchanges, eliminating regional licenses such as New York’s BitLicense and releasing a unified regulatory framework for cryptocurrency trading platforms and investors.
“I wouldn’t be adverse to those people coming in and talking to the [Office of the Comptroller of the Currency] about how a charter could make sense for them. But that is a long process they’d have to go through, and just because you get in the door doesn’t mean you’re going to get out the door on the other side,” said Noreika.
It could take a longer period for the US government and its financial regulators to offer unified licensing programs for cryptocurrency exchanges and bitcoin businesses. But, it is an optimistic indicator of bitcoin growth that the US, the second largest bitcoin exchange market behind Japan, is carefully considering creating a more robust and well-regulated market for investors and general consumers.
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Last modified: March 4, 2021 5:00 PM