The Law – What Is It?
Under the Japanese Payment Services Act, cryptos and utility tokens such as Bitcoin (BTC) and Ethereum (ETH) are regulated as ‘crypto assets’.
Stablecoins such as Tether (USDT), USD Coin (USDC) will likely fall under either the crypto asset category or the payment category, depending on whether they are redeemable with fiat currency.
Through the foreign exchange act, we can conduct the minimum necessary control or coordination of transactions to expand foreign trade. That brings currencies back to balance.
Inclusion of crypto in foreign transactions would mean stringent rules. Japan’s crypto exchanges and firms would have to scrutinize sanctioned countries and people.
According to a government official, Japan intends to amend its Foreign Exchange and Foreign Trade Act to include crypto exchanges under bank regulations.
The amendment is intended to stop sanctioned countries from using digital assets to take evasive actions.
According to Hirokazu Matsuno of the Cabinet Office, the government is planning to introduce a bill that will amend the foreign exchange laws to include crypto exchanges.
Fumito Kishida, the newly elected prime minister, also supports the revision and urges Western allies to work together to enforce the new laws.
Likewise, crypto exchanges must verify and flag transactions involving sanctioned Russian individuals or groups under the new foreign exchange laws.
Because of Russia’s actions in Ukraine, several western allies have imposed sanctions on it. Additionally, the country’s financial regulator told cryptocurrency exchanges not to allow
transactions for sanctioned targets.
We are concerned that Russia might try to evade sanctions using cryptocurrency due to its growing interest in the crypto market and recent comments made by its ministers.
Russians have been forced to seek alternative methods and payment systems to access the international trade market as a result of financial sanctions.
Although speculation about the potential use of digital assets for evading trade sanctions has been one of the hottest topics of discussion, experts have dismissed such concerns as “totally unfounded.”
Russia is facing a financial meltdown, and crypto has become a subject of scrutiny for its potential to serve as a conduit for foreigners seeking to circumvent sanctions.
Consequently, governments such as the UK and US have issued clear guidance on how crypto firms should comply with sanctions against Russia.
Russia’s crypto-skirming sanctions are blocked by Japan
On Monday, Japan announced it would revise its foreign exchange regulations so Russia could no longer evade sanctions with cryptocurrency.
It was an official decision made during a parliament session to amend its Foreign Exchange and Foreign Trade Act.
Hirokazu Matsuno, chief cabinet secretary, made the announcement at a press conference today. The revised bill will stop sanctioned nations from using cryptos to circumvent sanctions, he said.
In a statement released following the G7 summit, Fumio Kishida reiterated his commitment to revising the law and coordinating with western allies.
Reuters reports discussions are underway about the proposed amendment. The manager declined to comment on what the revision could be or the release date for the new rewritten document.
The amendment came after support from the public for sanctions against Russia, says Saisuke Sakai, a senior economist at Mizuho Research. He told Reuters,
As part of Russian sanctions, Japanese authorities ordered crypto exchanges to stop conducting crypto transactions involving Russian and Belarusian accounts.
Financial Services Agency, the country’s financial watchdog, stated “the sooner the better” to keep the momentum going in the G7.
Was this helpful?
0 / 0