FAFT Travel Rule to be implemented in Japan by 2022
More cryptocurrency regulations are to be expected in Japan following the Financial Action Task Force (FATF) travel rule. The regulations will enable Japan authorities to deal with money laundering activities.
The Financial Services Authority (FSA) has stated that they are planning to implement the FAFT travel rule by the month of April 2022. The regulations that will come after this implementation will prompt all providers of digital assets to share the transaction details of the traders of digital assets.
The regulator also stated that they were in a liaison with the Japan Virtual and Crypto Assets Exchange (JVCEA) to provide inform its members of the preparations they need to put in place as they await implementation of the travel rule. The main purpose behind the FAFT travel rule is to make sure that digital currencies are not used to fund terrorism activities or for money laundering activities. Government authorities in Japan have raised concerns over the use of cryptocurrencies to fund criminal activities in the country.
Japan already has a number of crypto regulations in place and the travel rule will only seek to enhance these regulations. Other countries that have taken measures to regulate cryptocurrencies include South Korea. South Korea provided stringent laws to prevent money laundering through crypto assets and this has pushed some firms such as OKEx out of the country.
The rise in crypto regulations across the world
Regulations into crypto assets have been increasingly rising across the world. Regulators in different countries have been looking for new ways that they can control the use and the nature of cryptocurrencies. This is because of the heightened risk associated with crypto assets being used for criminal activities. The recent surges in Bitcoin trading activities can also be seen as the cause for regulators to start enforcing lawns around the currency and other cryptos.
While most of the countries have implemented strict measures, there are those who are making plans to impose a complete ban on the use of crypto assets. Nigeria, which is the biggest market in Africa for Bitcoin, recently announced that banks in the country were prohibited from making any crypto transactions. India, which is also the largest market in Asia, is planning to implement a highly debated ‘crypto bill’ that is expected to be implemented in a few months.
The crypto community has deeply been affected by these new regulations. Firms and investors in this industry have stated that the new regulations are unfair to the active players of the industry. However, the future will only get more complicated for the participants of this industry as more countries are prosing implementation of new laws to govern the use of cryptocurrencies.