The details about The Downfall of Japan’s Self-Regulation in Crypto: Japan has been experiencing a downfall in its self-regulation in crypto. In 2018, Japan announced self-regulation allowing Japan Virtual Currency Exchange Association (JVCEA) to create guidance and sanctions in the virtual asset world.
It was supported by Japan’s Financial Services Agency (FSA) that experts should make rules in this industry. However, in the recent situation, this does not seem to be the case. The FSA warned JVCEA over its slowness in creating regulations.
Japan Virtual Currency Exchange Association (JVCEA) has reportedly copped a fair amount of flack from the Japan’s Financial Services Agency (FSA) over its slowness in getting regulation off the ground. #bitcoin #crypto
— Mind the chart (@ChartMind) July 20, 2022
Japan’s Self-Regulation in Crypto
One of the purposes of Japan to create self-regulation was to minimize inefficiencies. When this system first started, many people doubted that it would work. Some of them were afraid of the lack of expertise in this industry. Nonetheless, the government was positive it would work in the dynamic environment.
Why does it not work?
In a recent interview with Financial Times, one source said, “When Japan decided to experiment with self-regulation of the cryptocurrency industry, many people around the world said it would not work. Unfortunately, right now it looks as though they may be correct.”
Some sources also mentioned the reason why this self-regulation does not work. The lack of expertise is one of them. Some of them are not interested enough in the industry. Another reason is poor communication among the board members. The FSA has given a stern warning to JVCEA over this issue. One of the JVCEA board members added that they need more people with knowledge of the industry to fix this issue. With the fast-moving industry, skilled employees are needed to solve the problems.