An announcement from Japan’s Financial Services Agency (FSA) has revealed that at least 50 Bitcoin exchanges have filed registration applications with the agency. Those exchanges are currently being examined by the FSA to ensure that they have taken the right steps to ensure that their customers are properly protected, as required by recent amendments to the nation’s fund settlement law.
The amended law charges the FSA with processing license registration applications from digital currency exchanges, and ensuring that those exchanges remain compliant with financial protection laws. Each exchange must demonstrate that it has implemented safeguards that protect users, and must comply with rules regarding asset compartmentalization, risk management, and reporting to the agency.
The process for reviewing those registration applications requires an initial examination of an exchange’s operations to ensure that it meets those basic requirements. If those requirements have been met to the agency’s satisfaction, FSA undertakes a full review of the application. The law requires that exchanges be registered by September 20, 2017.
The registration requirements and process are all part of Japan’s broader recognition of digital currencies as a legal payment option. That legal recognition has been followed by increasing adoption of Bitcoin by companies within Japan, and a move by Fisco Ltd to experiment with the issuance of Bitcoin-denominated bonds.