Japan Set to Address New Crypto Regulations at the G20 Summit in June
According to local news outlet Sankei, the upcoming G20 Summit in Osaka, Japan, from June 28th to 29th, lists cryptocurrencies as a leading topic on the agenda. Prime Minister Shinzō Abe’s government will address recent amendments to the Financial Instruments and Exchange Law and the Fund Settlement Act regarding virtual currencies and the digital economy.
There will be a special focus on security. In the wake of the Coincheck hack, which drained $532 million worth of NEM last year from the Japanese crypto exchange, policymakers are aiming to intensify crypto trading restrictions.
Following the Coincheck hack, which was made possible due to crypto storage in hot wallets that interfaced with the internet, Japan’s Financial Services Agency has introduced legislation that requires customers to manage their own crypto assets using a “cold wallet” that is disconnected from the Internet.
Crypto margin transactions are to be regulated more tightly, permitting Japanese trading platforms to offer leverage up to four times more than traders’ deposits – significantly less than the 100x leveraged trades on BitMEX, the world’s top exchange for Bitcoin and crypto derivatives.
According to local news outlet Nikkei, the bill also prohibits any advertising that promotes speculative trading, and it forbids price manipulation.
Speaking at a press conference about the new crypto restrictions and amendments, Deputy Prime Minister and Finance Minister Tarō Asō announced that Japan will no longer refer to the asset class as “virtual currency” in order to avoid confusion with national fiat currencies such as the yen and the dollar.
“In light of international trends, the so-called ‘virtual currency’ designation in the world is expressed as ‘cryptographic assets’ and will be changed to this.”
Japan will host its first-ever G20 Summit in June, convening world leaders from Argentina, Australia, Brazil, Canada, China, the European Union, France, Germany, India, Indonesia, Italy, Japan, Mexico, Russia, Saudi Arabia, South Africa, South Korea, Turkey, the United Kingdom, and the United States.