Japan’s top financial regulator, the Financial Services Agency (FSA), could be set to introduce new laws to police decentralized finance (DeFi)-related projects operating in the nation – with non-fungible tokens (NFTs) also potentially in the firing line.
The FSA issued an official announcement stating that it would launch a “study group” that would look at ways “to deal with digital and decentralized finance and other matters.” The group, the agency added, would also look at ways to deal with the digitization of remittance systems and digital securities-related items.
The FSA added that it would look at cryptoasset-related policy, as well as matters pertaining to central bank digital currencies (CBDC) and NFTs. The former has become a pressing issue in the public and private sector alike, with the central Bank of Japan forging ahead with a CBDC pilot – and many private companies launching CBDC pilots of their own in anticipation of future CBDC-related business.
The agency stated that the group’s aim was “appropriately ensuring user protection” while also “promoting innovation in the private sector.”
NFTs have also become a big deal in Japan, particularly for culture industry creators. A number of major crypto players, such as the exchange Coincheck, have begun operating NFT marketplaces.
Although the study group will only have the power to make preliminary recommendations to the FSA, its influence is nevertheless second to none. The FSA has almost complete control over Japan’s crypto policy, and previous study group findings have almost universally resulted in changes to the nation’s crypto policy.
However, the group’s membership is not purely composed of regulators and think-tank executives – the study group also has a private sector presence. A senior executive from the major Japanese blockchain player LayerX was named among the members, alongside a Sony affiliate exec. A number of lawyers and academics were also included.
The panel will be chaired by Hideki Kanda, a legal scholar and the Honorary Professor of the University of Tokyo.