Japan is making big moves again! New regulations for the cryptocurrency sector have landed, is this the real deal this time?

Friends, the Japanese Senate has just dropped a “game changer” — the amendment to the 'Funds Settlement Act' has officially passed! This new regulation directly brings a “tiered package” to the crypto market: on one hand, it lowers the threshold for innovation, and on the other hand, it tightens the fences to protect investors, a perfect example of “wanting it both ways”.

The threshold has been lowered, and small players can now join the game!

Previously, to open an exchange in Japan? You had to pay a few hundred million yen in deposits first! Now, with the new regulation, there's a “brokerage business” model, allowing trading without having to custody user assets; just register and you can operate. For instance, if a small team next door develops a DEX (decentralized exchange), as long as they are associated with a compliant exchange, they can operate legally. This move has slashed startup costs to the ankle, and individual operators in the crypto sector are ecstatic!

Investor protection has been upgraded, goodbye to the FTX tragedy

Remember when FTX collapsed, and user assets were taken overseas with no way to recover them? The new Japanese regulations hit hard: exchanges must keep user assets on domestic soil! In case a platform fails, the government can freeze the assets immediately and return them to the investors. This move deserves applause, as we no longer have to gamble on the character of exchange owners!

Stability is key, can government bonds serve as a backing for stablecoins?

Even more remarkable, Japan allows stablecoin issuers to invest 50% of their reserves into Japanese and U.S. government bonds and time deposits. In layman's terms: stablecoins not only have cash backing, but they can also earn interest! In the future, seeing a yen stablecoin might be more appealing than bank wealth management.

Don’t be fooled by the current relaxed regulations; the Financial Services Agency of Japan is keeping a watchful eye. New intermediaries must “acknowledge their parent” (affiliation system), and if exchanges deviate even slightly from the norms, they will immediately face penalties. Compliance is a blessing, but if a small platform tries to pull off shady operations? They’ll be sent straight to jail in no time!

Japan's precise, bomb disposal-style regulation is clearly signaling to global capital: come play here, it's safe and thrilling! Want to keep up with policy trends? Follow me for the first-hand decoding of global crypto policies! If you miss out on the opportunity, don’t blame me for not reminding you.