Japan is getting ready to announce new anti-money laundering regulations that will make it simpler to keep track of crypto transactions as it continues to follow other nations in the region.
According to a Tuesday article in Japan Today, the country’s government plans to put the new regulations into effect on June 1 together with the execution of the so-called travel rule.
It requires financial institutions to disclose particular information among themselves to prevent, identify, and punish money laundering and other financial crimes.
Additionally, each stage of a given transaction must contain names, addresses, and other information that may be used to identify a person financially. For suppliers of services for virtual assets, the regulation was later modified.
The Financial Action Task Force (FATF), an intergovernmental organization in charge of implementing the legislation, found Japan’s earlier attempt at implementation in 2021 inadequate.
About two years ago, Japan increased its criteria for cryptocurrency regulation in response to accusations leveled at it. The FATF publicly shamed Japan for its “inadequate progress” on the subject of digital assets as part of its critiques.
As a result, the Japanese legislature passed an important investor protection bill in June of last year, creating a legal framework for stablecoins and recognizing them as digital currencies.
The law only permits recognized financial institutions, such as registered banks, money transfer businesses, and trust firms, to issue stablecoins.
To stop cryptocurrency transactions that could be reaching sanctioned Russian nationalists, the government also sought revisions to its Foreign Exchange Act around the same time.
Coincidentally, Hong Kong is predicted to loosen restrictions on virtual asset providers formerly forbidden from serving retail crypto investors, while Japan tightens its AML regulations for cryptocurrency.
Though Hong Kong and other places continue to pursue more aggressive laws in the wake of a tough year for digital assets and the collapse of FTX, a particularly sore area for Singapore, Hong Kong and other places do so, too, including Japan and most of the regions throughout Asia.