The law is one of the most complex elements of the society. It is, or needs to be, in constant change, to adapt to modern times and include more items and things as they appear. That is why cryptocurrencies are so difficult to regulate: the way they are viewed, used, stored, and traded differs from country to country.
Japan has long been one of the nations that have showed the most advances regarding the regulation of these assets. In a recent development reported by news site Nikkei this week, the country’s House of Representatives passed over a new crypto regulation to the upper house of the National Diet.
To the House of Councillors
The lower house, according to the report, passed crypto related amendments to the current law that functions in the country to the House of Councillors, at a plenary session that took place in the last few days.
The two proposed amendments to the existing legal instruments, which are Financial Instruments and Exchange Act and Payment Services Act, are looking to strengthen Japanese regulations on the cryptocurrency trading process, at various stages. Most specifically, the amendments in question will add rules for cryptocurrency margin trading, an otherwise unattended area.
The proposed legal document comes with a slight modification when it comes to terminology: the phrase virtual currencies will be now called crypto assets, which has a more inclusive connotation.
Crypto Assets and Not Virtual Currencies
Last month, Taro Aso, who is the current Minister of Finance and Deputy Prime Minister in Japan, was the one that prompted journalist and specialists in the industry to stop using the term “virtual currencies” and replace with crypto assets, a newly introduced concept in the country’s regulations.
If you think that the way the term is known in the country has no importance, consider that this week, it was reported that Russia was delaying the adoption of cryptocurrency regulations because the Financial Action Task Force on Money Laundering stated it was required to legislate the words “cryptocurrencies” and “Bitcoin,” and not the more global term “digital assets.”
Examples like the one showed above may sound overly strict, but in an up-and-coming global industry such as cryptocurrencies, and especially when it involves trading of these assets, concept clarity is crucial for achieving success.
More Changes Coming
Japanese legislators have been discussing the possibility of introducing regulations regarding cryptocurrency margin trading since the month of March. The local government’s executive organism, which is the Cabinet of Japan, gave the green light to draft amendments to the nation’s financial instruments and payment services regulations. Among the changes was the limitation of leverage in crypto margin trading at two to four times the initial deposit.
For reference, margin trading refers to the use of borrowed funds from a broker with the objective of trading any financial asset, forming what is known as”collateral” for the loan in question.
By Andres Chavez