A government official said on Monday that Japan intends to revise its Foreign Exchange and Foreign Trade Act to put cryptocurrency exchanges under the jurisdiction of banking rules. The suggested modification is being implemented to prevent sanctioned nations from engaging in evasive behavior with digital assets.
In a news conference, Chief Cabinet Secretary Hirokazu Matsuno stated that the government intends to draft legislation to modify foreign exchange laws to include crypto exchanges.
The country’s freshly elected prime minister, Fumio Kishida, likewise endorsed the proposed modification and urged for coordinated enforcement efforts with Western partners.
Crypto exchanges, like banks, will be compelled to check and flag transactions connected with sanctioned Russian persons or entities under the amended foreign exchange legislation.
Japan, along with the majority of its Western partners, imposed various financial penalties on Russia in response to its activities in Ukraine. Earlier this month, the country’s financial regulatory agency also requested that crypto exchanges desist from processing transactions for sanctioned individuals.
A parliamentary modification to the legislation, on the other hand, would make it a legal requirement for cryptocurrency exchanges to block transactions for certain sanctioned Russian politicians, oligarchs, banks, and other entities.
The reason for concern about Russia potentially attempting to avoid sanctions by adopting bitcoin stems from the country’s rising interest in the crypto industry, as well as recent remarks made by its ministers.
Russia has been obliged to seek alternate payment channels and ways of access to the international commercial market as a result of financial restrictions. While worries regarding the probable use of digital assets to avoid trade restrictions have been one of the most heated issues of debate, experts have dismissed such fears as completely false.