Token Screening Systems may be Phased out by Japanese Crypto Exchanges
- The Japanese industry body in place to regulate cryptocurrency exchanges may consider relaxing constraints on new token listings.
- The AUthority that seeks to regulate Japan’s cryptocurrency exchanges is in negotiations to minimise strict guidelines for listing digital tokens after Prime Minister Fumio Kishida’s administration expressed disappointment with the current status quo.
- The government must approve crypto exchange listings in Japan, culminating in only 21 crypto exchanges on Japan’s largest exchange.
After Prime Minister Fumio Kishida’s administration voiced displeasure with the current structure, the body that regulates Japan’s cryptocurrency exchanges is in talks to eliminate stringent guidelines for listing digital tokens.
The Japan Virtual and Crypto Assets Exchange Association (JVCEA), which supervises digital coin listings, is debating whether local exchanges should be allowed to list cryptocurrencies without going through the JVCEA’s screening.
Token listings for crypto exchanges are approved by the Japanese Virtual Currency Asset and Exchange Association (JVCEA). Japan’s financial regulator, the Financial Services Agency (FSA), has given the association permission to handle the process on its behalf. If new companies want to get a large number of tokens accepted, the current system makes it difficult for them to contend with existing players.
The self-regulatory body will concentrate on governing the assets once they are listed rather than being engaged in the listing process.
The FSA has also advised the self-governing body to specify its permitting process after JVCEA members made complaints in the beginning of the year that the lengthy process, which pertains even to coins that are widely used around the world, is restricting the industry’s growth.
An easing of the rules would mark a significant shift in Japan’s cryptocurrency trading market, and it could be a boon for international newcomers like Coinbase Global, which have a deeper understanding of tokens than local firms.
A “green list” of 18 popular crypto assets was released by the Japan Virtual and Crypto Assets Exchange Association (JVCEA) in March. There are 31 exchanges in the country that make up the group.
The green set, which includes high-volume tokens like Bitcoin, Ethereum, XRP, and Litecoin, was created to allow them to bypass the time-consuming screening test that digital assets must go through to be classified for trading in Japan.
The new regulations will not apply to initial coin offerings. The JVCEA plans to make a judgement call on whether or not to make changes by the end of the year.
Mr Kishida is a member of a government panel that disparaged the coin listing procedure in May, saying that “the certified self-regulatory organisation tends to spend a long time pre-screening” crypto assets and that it would “ease the criteria while being mindful of the need to protect users.”
A legal obligation for crypto exchanges to disclose any proposals to list new tokens to the regulator will probably stay even though the screening process gets cut.