As China is withdrawing from bitcoin trading, operating licenses have been issued to 11 bitcoin exchanges by Japan's Financial Services Agency (FSA)
The new Japanese law established bitcoin as a legal payment method and is now enforcing new ruling regarding security guidelines for cryptocurrency exchanges.
The licensing enforces certain operational requirements for the exchanges. These include: the verification of customer identities, the segregation of customer accounts and high standards for cybersecurity.
The new regulations are intended to protect investors from fraud and cyber crime, while supporting financial technology innovation.
The registration places several requirements on the companies, such as building a strong computer system and checking the identity of users to prevent money laundering.
Japan is currently uniquely proactive in its cryptocurrency regulations.
Bitcoin payments may be accepted at over 260,000 stores in Japan by this summer as result of partnerships between bitcoin exchanges and major retailers.
Coincheck, which holds most of the bitcoin payment market share in Japan, will bring Bitcoin payments to shops that use AirRegi, a point-of-sale app developed by Recruit Lifestyle, by this summer.
Using AirRegi customers can simply scan the barcode displayed on the app to pay with bitcoin. Coincheck will then process the transaction, converting the bitcoin into yen.
It was also very recently reported that Japanese banks are considering setting up their own digital currency called the J-Coin.
Japan already had over 4,000 locations accepting bitcoin and considering the tax incentives and the new favourable regulations the country is expected to have a positive impact on consumer confidence and growth of the domestic virtual currency market.
As for the new regulations and licensing the exchange firms are reacting very enthusiastically.
Quoine, one of the 11 bitcoin exchange firms to receive a license said that they are aiming "towards the healthy development of the cryptocurrency industry within Japan and on a global scale."
"Japan has been exploding with demand for both bitcoin trading as well as virtual currency services," said Bitflyer's CEO, Kano.
"The FSA's approval for bitFlyer to operate as a Registered Virtual Currency Exchange, and the agency's openness and forward thinking regulation could not come at a better time for the blockchain space."
Lifehack Finders Nice to know:
Blockchain is a digital leger that is dispersed across networks. It is used in the cryptocurrency space to securely record every transaction between users.
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