In Japan, the new regulation of cryptocurrencies will enter into force on May 1

In Japan, new laws regulating cryptocurrencies are the Payment Services Act (PSA) and the Financial Services Act.Instruments and Exchanges (FIEA) - will enter into force on May 1 of this year.

The laws were passed by the Japanese parliament last year, and were due to take effect on April 1. However, due to unplanned delays, the implementation of the new regulation was delayed until May 1.

Since there are no official laws in Japan,Regulating cryptocurrencies, amending existing acts is the only way for digital assets to have any legal status in the country. Therefore, quite a few amendments were made to the PSA, including changes to the basic terminology and toughening the rules for cryptocurrency custody services.

In addition, cryptocurrency exchanges engaged inactivities in Japan will have to separate user funds and own funds. That is, they will need to find a third-party company responsible for storing user funds using “reliable methods” like cold wallets.

If customers insist on using hot wallets, the exchange must keep an appropriate amount of funds in order to compensate users for their losses in the event of a break-in.

Changes to FIEA introduce the concept of transfer of rights totokens in order to regulate initial offerings of tokens (ICOs) and sales of tokens-shares (STOs). Also, cryptocurrency derivatives trading will fall under FIEA, namely this type of trade is most popular in Japan.

Let us recall that in March the Japan AgencyFinancial Services Authority (FSA) has announced the launch of the Blockchain Governance Initiative Network (BGIN), which will promote the “sustainable development of the blockchain industry.”

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