Japan Takes Lead in G7 Crypto Regulations, Plans Strict AML Laws

Japan crypto regulation
Crypto regulations continue to be a hot topic in the United States and around the world. Since the emergence of cryptocurrencies, their popularity and usage have steadily increased. In recent years, they have experienced a significant boom. As a result, concerns about the protection of investors and the potential risks associated with these digital assets have grown. 

Various countries and financial institutions worldwide have turned their attention to implementing regulations for cryptocurrencies, viewing them as a potential solution. These entities have made ongoing efforts to address this issue and ensure the safety of investors.

Recently, leading economies in Asia, Japan, reported to bring stricter anti-money laundering regulations. In addition, there were indications of including FATF suggested “travel rule” obligations.  

According to the Japanese media outlet, Kyodo News, the country’s Cabinet took the decision of imposing the AML measures from June 1, 2023. The new stricter measures are said to be aimed at tracking cryptocurrency transactions. These actions were indicated as initial steps towards a regulatory framework for the burgeoning digital asset class “in line with global standards.”

In December 2022, as reported, Japan made amendments in the “relevant laws” following the concerns from global financial crime regulators. The Financial Action Task Force (FATF) indicated the insufficiency of anti-money laundering steps. 

As far as the legality of cryptocurrencies in Japan is concerned, there are no restrictions in the region akin to other counterparts like China. Reports suggest crypto payments get recognition after the Payment Services Act. It defines payment methods other than fiat currency. Investing and holding cryptocurrencies are not restricted in Japan. 

The prestigious Group of Seven (G7) summit is going on in Japan under its presidency for 2023. Prior this month, it's intergovernmental political forum gave signals for supporting the efforts of FATF for boosting the implementation of its travel rule globally. Following the implementation, the rule would make it mandatory to share the information related to transactions made through cryptocurrencies among financial institutions. By the time, Japan didn’t show agreement towards the suggestions, but is now reportedly thinking of implementing it along with crypto anti-money laundering initiatives.

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