Japanese exchanges have begun to receive formal operating licenses from local regulator the Financial Services Agency (FSA). Major trading platforms QUOINE and bitFlyer were among the first to get the formal certificate of approval.
Exchanges Relieved After Six Month Process
Bitsonline called in on the operators of both exchanges today after they visited FSA headquarters.
CEO Mike Kayamori of QUOINE looked pleased and relieved to get the license — certificate number #00002. Certification, he said, meant companies would have to take the business a lot more seriously, operating more like traditional financial institutions.
“There’s all kinds of fiduciary responsibilities — monthly reports, quarterly reports, transaction reports, suspicious activity statements, etc,” he said.
QUOINE has been doing all this since first applying in April, though. “You don’t just start complying after you get your license,” Kayamori added, “The laws took effect on 1st April; they’ve been watching us for the past six months.”
In the end, receiving the certificate itself was pretty straightforward. There was a small meeting at FSA headquarters in Tokyo’s capital district, and a sense that things were now more serious.
QUOINE, bitFlyer Among the First to Get Licenses
QUOINE’s competitor bitFlyer also received its certificate (number #00003) today. The FSA announced its first approvals at a media conference in Tokyo at 4PM local time on Friday 29th September, with bitFlyer holding its own event shortly after.
Exchanges were invited to apply for operating licenses when Japan’s new digital currency-friendly laws began earlier in 2017. It was no rubber stamp, and there’s no guarantee all exchanges operating today will obtain (or keep) their certificate.
For exchanges — and the digital economy in Japan — this is the beginning of a new era. Though many in cryptocurrency scoff at the idea of government permissions, for the moment it’s the reality.
Japan Decided to Regulate, Not Ban
Japan got a taste of the Bitcoin Wild West in 2014 when Mt. Gox brought a ton of unwanted international attention. Mopping up that mess is an ongoing concern almost four years later, and Japan was eager to avoid the same thing happening again.
For cryptocurrency in Japan, it was either regulation like other financial services, or oblivion. Proponents can feel lucky at least that Japan has chosen regulation over bans, uncertainty and roadblocks.
For exchanges like QUOINE and bitFlyer, the next step could be the ICO market. That’s a whole other issue. The FSA is reportedly comfortable only with assets it has spent time studying, including Bitcoin, Bitcoin Cash, and Ethereum.
Next Step Is ICO Trading – but Not in Japan for Now
QUOINE recently launched an altcoin and digital token exchange called QRYPTOS, but it’s only available to traders outside Japan. BitFlyer has its professional-focused Lightning exchange which also has crypto derivatives — again though, only BTC, BCC, and ETH.
Both exchanges are aimed at professional FX traders as much as consumers. It’s a lucrative market, especially in Japan with its army of “Mrs. Watanabe” amateur forex speculators. In fact, FX may even count as a national pastime — and the exchanges know it well.
Regulation by the FSA will make that easier — at least for the traders. For the companies themselves, it’s a lot of responsibility.
Do you think Japan is handling the digital asset market well? Let’s hear your thoughts.
Images via Jon Southurst