The Japanese House of Representatives has officially approved a new bill to amend national laws that govern crypto regulation, Japan reported on May 31.
The bill — which had been prepared by Japan’s Financial Services Agency (FSA) and accepted by the House in mid-March of this year — has been passed by a majority in the House of Councilors plenary session, according to an update today on the FSA’s website.
The bill seeks to introduce amendments to two national laws that apply to crypto assets — the Act on Fund Settlement and the Financial Instruments and Exchange Act. Now that the bill has been passed, the revised Acts are expected to come into force in April 2020, Cointelegraph Japan reports.
The proposed amendments to Japan’s financial instruments and payment services laws will ostensibly tighten cryptocurrency regulation in a bid to promote user protection, more robustly regulate crypto derivatives trading, mitigate industry risks such as exchange hacks and broadly establish a more transparent regulatory framework for the new asset class.
As previously reported, the bill also establishes a legal name change for cryptocurrencies as “crypto assets,” formerly designated in the country as “virtual currencies.”
The bill also provides for more robust legislation for crypto margin trading, limiting leverage to two to four times the initial deposit.
Cointelegraph Japan today notes that while there is reportedly a view within the industry that regulation has thereby been tightened, some consider that Japan’s virtual currency regulation will set a global benchmark for regulating the sector.
In April, Japan’s Minister of Finance and deputy prime minister Taro Aso urged reporters to stop using the term “virtual currencies” and to shift to the newly-introduced legal name. The new definition ostensibly aims to prevent investors confusing cryptocurrencies with legal tender.
Earlier this month, Cointelegraph reported that Russia was postponing the adoption of crypto regulation due to a requirement from the Financial Action Task Force that it expand the terminology of a federal bill to legislate major industry terms such as cryptocurrencies and bitcoin (BTC).