Japan’s regulator suggests ‘stopping’ P2P transfers from fiat to crypto
The Financial Services Agency (FSA) — Japan’s principal financial regulator — has suggested several measures to protect users from “unlawful transfers” to crypto exchanges. One of which might seriously complicate the peer-to-peer (P2P) transactions market.
On Feb. 14, the FSA published a request addressed to Japanese banks. According to the regulator, the number of fraudulent transactions in the country remains high, and most involve crypto assets.
Related: Japan to resolve CBDC issuance legalities by Q2 2024
Hence, the FSA and the National Police Agency (NPA) are encouraging banks to “further strengthen their user’s protection.” To achieve this, the FSA and NPA refer to several key initiatives.
One of them doesn’t reveal much, prescribing banks to “strengthen monitoring of unlawful transfers to crypto-asset exchange service providers.”
The other might significantly disrupt the P2P market. The regulator suggests:
“Stopping transfers to crypto-asset exchange service providers if the sender’s name is different from the account name.”
The Japanese version of the press release uses the verb reject, explaining that suspending such transfers should include individual and corporate accounts.
As users of P2P platforms know, the mechanics of such transactions imply that the names of the sender and receiver on the fiat and crypto ends of the transaction are always different. Hence, if Japanese banks reject any transactions from one individual’s bank account to another’s crypto wallet, that could seriously compromise the P2P market.
It should be noted that the current FSA request is written as a recommendation, and it doesn’t demand compliance with specific requirements but instead refers to initiatives. How exactly the banks will react to these recommendations and whether they will disrupt the P2P market remains to be seen. Cointelegraph reached out to the FSA for further clarification.
In December 2023, Japan’s government unveiled new tax reforms, which would save firms from paying taxes on “unrealized gains” from cryptocurrency holdings. However, the bill still needs to be approved by both chambers of the Japanese parliament, the House of Representatives and the House of Councilors.
Magazine: Big Questions. How can Bitcoin payments stage a comeback?
Disclaimer: The content of this article solely reflects the author's opinion and does not represent the platform in any capacity. This article is not intended to serve as a reference for making investment decisions.
You may also like
Trump-backed World Liberty Financial taps Chainlink to drive mass DeFi adoption
ZKsync approves proposal to distribute 325 million ZK tokens to boost liquidity across chains
Shiba Inu Community Pushes Token Toward $0,001
Can You Turn $500 Into $500 With These Cryptocurrencies?