Japan has become the first country to approve a self-regulatory organization to oversee crypto exchanges.
“It’s a very fast moving industry. It’s better for experts to make rules in a timely manner than bureaucrats do,” an unnamed senior official at Japan’s Financial Services Authority (FSA) said according to Reuters.
“With the acquisition of accreditation, we will continue to make further efforts to create an industry that you can trust,” said the newly approved self-regulator, The Japan Virtual Currency Exchange Association.
They’re currently planning to take a stricter approach than FSA in light of a number of big hacks in Japan, with the self regulator to publish a new document containing some 100 pages of guidelines.
They plan to ban insider trading, privacy coins like Monero, and margins above 4x with the new body expected to enforce compliance.
“The self-regulatory body’s workload is likely to be heavy and there is an issue of whether it can secure enough staff with expertise in crypto exchange business,” Yuri Suzuki, a senior partner at the Japanese law firm Atsumi & Sakai, told Reuters.
They’re overseeing just 16 exchanges at the moment, with Japan’s crypto industry seemingly more proactive in being at the forefront of regulatory requirements.
Something similar has been suggested for the ICO industry in particular, but token based projects have failed to group together under an umbrella so far.
That has allowed the Securities and Exchanges Commission (SEC) to fully set the agenda with very little input from the crypto industry, unlike the stocks/securities industry which has its own self-regulator.
Whether that will change in the future remains to be seen with much potentially depending on how Japan’s new crypto association performs.
While in UK, a crypto self-regulatory organization was set-up in February by Coinbase and others, but they haven’t yet secured backing by FCA.
As the crypto industry grows we may see more likewise organizations, with some in US suggesting Congress should set-up a crypto specific regulator staffed with individuals that are expert in the field.
There hasn’t been much movement on that front yet, but regulators around the world will probably study all these different approaches and their effect on the economy, with rules of thumb perhaps following.