Payment Services Act and revision proposal upon Financial Instruments and Exchange Act.
Today, we will discuss revision proposal upon Financial Instruments and Exchange Act, planned to be executed in 2020.
What is Payment Services Act?
Payment Services Act is a law established to enforce appropriate operation of payment services. Before, only banks were allowed to transfer money, but now fund transfer business operator with a permission is allowed to transfer small amount of money.
What is Financial Instruments and Exchange Act?
Financial Instruments and Exchange Act was established to protect investors from financial products with high investment possibility. Mainly it includes rules exchange must follow and appropriate response to illegal transfers. Cryptocurrency exchange must follow these rules.
March 2019 : Revision Proposal passed the cabinet meeting
On March 15th, 2019, Revision Proposal passed the cabinet meeting to clarify the rules of cryptocurrency and maintain regulations.
1. Cryptocurrency → Crypto asset
Understanding the global trend, this proposal will change the name from Cryptocurrency to Cryptographic asset. This changes the recognition from currency to asset.
2. Regulation of cold wallet management for cryptocurrency
This was done because coincheck was hacked back in 2018 because they managed the currency with hot wallet. If a company needs to manage the currency with hot wallet, now the company is required to hold the same amount of asset.
3. Clarification of ICO token with the right to accept revenue sharing as a target of Financial Instruments and Exchange Act
The act clarified that ICO token with the right to accept revenue sharing is a target of Financial Instruments and Exchange Act. Same as a stock, issuer is required to open their information and buying and selling of cryptocurrency will be regulated.
May 2019 : Passed the Lower House Main Meeting
On May 23rd, 2019 the revision proposal which passed the cabinet meeting passed the Lower House Main Meeting.
June 2020 : Revision Proposal planned to be executed
After acceptance from House of Representatives, revision proposal would be executed in June.
Legal regulations surrounding cryptocurrency is changing drastically and it is crucial for us to catch up with the latest news.
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