Japan urges crypto industry to be regulated on a par with banks

The Financial Services Agency of Japan (FSA) has urged global regulators to treat the cryptocurrency industry as stringently as banks. The story is reported by BNN Bloomberg.

Mamoru Yanase, deputy director of the FSA’s Strategy Development and Management Bureau, noted in an interview the growth of the digital-asset sector and the need for higher-quality oversight.

“If you want to implement effective regulation, you must do the same as with traditional financial institutions. … The recent FTX scandal was not caused by deficiencies in cryptocurrency technology. It was caused by weak governance, weak internal controls and a lack of proper oversight,” Yanase stressed.

According to him, the FSA has “begun urging” its colleagues in the United States, Europe and other countries to subject crypto exchanges to tighter regulation. They must “firmly demand” measures from platforms to protect consumers and prevent money laundering, in addition to sound governance, disclosure and auditing.

A representative of the agency did not rule out the creation of a global mechanism for resolving problems and coordinating actions in the event of the bankruptcy of major cryptocurrency firms. Regulation discussions should place particular emphasis on ensuring consistency, Yanase said.

Earlier FSA recommended restricting algorithmic stablecoins on the territory of the country. In the agency’s view, “stablecoins” are at risk of triggering a bank run.

Back in November 2022, U.S. Representative Tom Emmer called the collapse of FTX a failure of crypto regulation for the crypto industry.

Read ForkLog’s Bitcoin news on our Telegram — cryptocurrency news, prices and analytics.