In a move that is sure to appease both cryptocurrency investors and government legislators, two crypto trade groups in Japan have agreed to create an organization that will self-regulate the cryptocurrency market.
The organization, which has yet to be given a name, will work in conjunction with the Financial Services Agency (FSA) in Japan to create and monitor the regulations. Self-regulation is one of the solutions most government bodies have requested be enacted within the digital currency industry.
The trade groups represent 16 registered cryptocurrency market operators, all of which will work side by side to design and implement industry-wide investor safety standards. One of the member groups, the Japan Cryptocurrency Business Association (JCBA), will also establish policies for initial coin offerings (ICOs), as well as require member compliance to its standards. This is the same design of the Japanese Securities Dealers Association, which holds power over its members.
JCBA chair, Taizen Okuyama, also serves as president of foreign exchange platform Money Partners Group. Okuyama will serve as the chair for the new organization once it turns on the lights. The position of vice chairman will be given to BitFlyer CEO Yuzo Kano, who also heads the Japan Blockchain Association.
The new organization still needs approval by the FSA. If approved, the group will be able to prohibit certain digital currencies from operating in the country. This decision could come, for example, if the coin is found to be used for laundering money. Despite not yet receiving the green light from the FSA, the organization has set up provisional operations for registered entities and exchanges.
The news comes following a similar agreement created in the UK. Last month, seven of the largest global crypto entities signed a pact to create CryptoUK, a trade association with the goal of self-regulation in the UK. It is comprised of BlockEx, CoinShares, CommerceBlock, Coinbase, eToro, CryptoCompare and CEX.IO. Coinbase UK CEO Zeeshan Feroz said of the initiative, “The fundamentals are engaging as a single industry with the government. Regulation is imminent and that’s a good thing.”