Japan is set to introduce new rules for money transfers with regard to travel to prevent the use of crypto for money laundering, according to a report from news agency Nikkei.
The new regulation will bring Japan in compliance with the recommendations of the Financial Action Task Force (FATF), an international organization that oversees anti-money laundering activities. Back in 2019, the organization had urged countries around the world to adopt the rule. With this adoption, Japan is set to follow the lead taken by the US, Germany, and Singapore.
Accordingly, amendments to Japan’s current Act on Prevention of Transfer of Criminal Proceeds will be introduced in the National Diet, Japan’s parliament, on 3 October. This would bring crypto within the scope of travel regulations for money transfers. Under the new law, exchange operators would be required to collect customer information, including the customer’s name and address, in transactions involving cryptocurrency and stablecoins as they currently do with cash transactions.
Furthermore, the legislation is extended to the Foreign Exchange and Foreign Trade Act and the International Terrorist Asset-Freezing Act, which will go into effect in May 2023. The new legislation to track money laundering in crypto will penalize exchange operators that break the rules. The news report mentioned that they would be subject to administrative guidance and corrective orders.
Japan at the forefront of crypto regulations
Following the example set by its neighbor South Korea, Japan has taken significant steps to regulate crypto in recent months. In addition to setting up the FATF, the parliament passed a law to limit the issuance of stablecoins by non-bank institutions. Moreover, the Ministry of Economy, Trade and Industry opened a Web 3.0 Policy Office to foster the Web 3.0 business environment. Furthermore, the Financial Services Agency, the Japanese tax authority, is considering easing capital gains tax on crypto assets following requests from the industry.
