Japan’s FSA Unveils Financial Policy Focus for 2023:

Japan’s Financial Services Agency (FSA) released its financial administrative policy for the fiscal year 2023 on August 29, outlining key areas of focus. The policy aims to ensure that Japan’s economic activities and public life remain stable amidst changing socio-economic conditions and are geared towards future growth. 

The agency is also committed to creating a financial system that balances economic growth with the resolution of various social challenges, including climate change and digital transformation. To achieve this, the FSA will implement in-depth monitoring to ensure that financial institutions maintain their integrity while adhering to laws and regulations and focusing on customer-centric operations. 

Additionally, the FSA plans to continually evolve its financial administration by enhancing data utilization, strengthening policy communication both domestically and internationally, and improving the skills and qualities of its staff. The agency emphasizes the importance of “in-depth monitoring” to ensure that financial institutions not only comply with laws and regulations but also operate in a manner that is customer-centric. 

One of the standout points in the policy is the FSA’s commitment to addressing issues related to climate change and the advancement of digitalization. The FSA’s financial administrative policy for 2023 reflects a balanced approach to economic growth and social challenges, aiming to stabilize Japan’s economic activities and public life, build a problem-solving financial system, ensure the stability and trust of the financial system, and continually evolve financial administration.

The official announcement was made on the FSA’s website on August 29, 2023. This article is based on the official announcement by the Financial Services Agency (FSA) and aims to provide an unbiased, third-party perspective.


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Japan Concerned About AI Chatbots

The use of chatbots as integrations into new forms of technology and society has been rapidly growing in recent years. On the other hand, this has led to increased public concern on their effect on society. The results of a recent study that was conducted in Japan and made public on the 30th of April found that 69.4% of the country’s population favors more stringent control in the development of AI. According to a study by Kyodo News, many individuals are concerned about the proliferation of artificial intelligence chatbots.

The poll was carried out as a component of a larger study that included a variety of issues, including the current approval rating of the government and events relating to pandemics. The AI component, on the other hand, was added not long after Japanese government officials voiced their support for OpenAI, the firm that is responsible for ChatGPT. On April 10th, the Chief Cabinet Secretary of the Japanese government, Hirokazu Matsuno, said that the government is considering integrating AI into its systems, but only if concerns around privacy and cybersecurity are satisfactorily addressed.

Additionally, Japan has been actively advocating for a regulatory climate that is friendlier to innovation in the crypto and Web3 sectors. On April 6th, a new white paper titled “Ways to Expand the Local Crypto Scene” was published by the team working on the country’s Web3 initiative.

The regulation of AI has been a matter of intense interest for governments all around the globe. It was one of the first nations to place a temporary ban on the use of ChatGPT; however, authorities have since said that the technology may be allowed to rejoin the country after it complied with the criteria for transparency. In Germany, supervisory authorities have begun their own inquiry into whether or not ChatGPT complies with the General Data Protection Regulations. Legislators from all member states of the European Union are now putting the finishing touches on the Artificial Intelligence Act, which will serve as a model for the rest of the world.

As a result of the rapid increase in the development of AI technology, China will soon implement required security inspections for artificial intelligence (AI) enterprises as well as the technology itself.

The worries that have been voiced in Japan are reflective of a larger discourse taking place all across the world concerning the effect that AI will have on society. AI chatbots have the potential to transform many different sectors; nevertheless, it is essential to guarantee that their development is carried out in an ethical manner and with sufficient regulation in order to preserve the privacy and security of individuals.


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Binance set to reenter Japanese crypto market

Binance, one of the most prominent cryptocurrency exchanges in the world, is planning to make a comeback to the Japanese cryptocurrency market after its recent acquisition of the licensed cryptocurrency trading platform Sakura trading Bitcoin (SEBC). Binance’s purchase of SEBC was finalized in November 2022, and the company plans to rebrand the SEBC platform as the Japanese version of Binance in June 2023.

A story that was published in a regional daily said that SEBC would stop providing its existing cryptocurrency exchange and trading services on May 31, 2023. The message did not include an announcement about a date for the formal debut of Binance Japan. Users of the SEBC exchange have until the deadline of May 28, 2023 to remove their cash from the exchange. By the 5th of June, any funds that are still present in these accounts will be automatically converted into Japanese yen and transferred to the users’ respective bank accounts. Users of the Japanese version of the cryptocurrency exchange Binance will soon be required to go through updated identity verification and Know Your Customer checks.

Nearly five years have passed since Binance’s initial attempt to obtain an independent license in Japan was unsuccessful. The company has now reentered the Japanese market through an acquired entity. In 2018, Binance was forced to halt its operations in Japan after receiving warnings from banking officials that it was doing business without proper regulatory permission. However, the exchange platform has been successful in mending its relations with regulators and returning to other markets through the acquisition of stakes in regulated entities.

Binance was able to successfully rejoin the Malaysian cryptocurrency market by obtaining a share in a regulated exchange platform. This occurred prior to Binance’s comeback into the Japanese market. The stock exchange also reentered the market in Singapore by purchasing an 18% interest in a stock exchange that is regulated. In a similar manner, the cryptocurrency platform was able to get access to the sterling payment network in the United Kingdom via a collaboration with Paysafe, despite the fact that authorities had denied the platform access to the same network.

Japan was one of the first countries to implement cryptocurrency rules, and its regulatory standards have always been seen as being particularly stringent. Nonetheless, the country has since loosened some of the regulatory requirements that must be met by cryptocurrency platforms, making it simpler to list new cryptocurrency tokens. Binance’s reintroduction into the Japanese market is a major milestone in the cryptocurrency industry of that nation, and it emphasizes the need of regulatory compliance for enterprises that operate in this area.


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Asia Crucial to Web3 Gaming Industry

According to a recent report by DappRadar, Asia is a crucial region for the Web3 gaming industry, given its majority share of gamers and gaming revenue, as well as its high interest in blockchain technology. The report highlighted that the Asian market boasts over 1.7 billion video game players, accounting for 55% of the world’s total. In addition, Asia houses over half of the global gaming revenue and has long been “the driving force” behind the global gaming industry.

DappRadar claims that due to these factors, the Asia region “plays a crucial role in the adoption of blockchain gaming.” However, while China, Japan, and South Korea dominate the gaming industry in Asia, they have varying attitudes towards blockchain technology.

China, for instance, has banned crypto and prohibits gaming companies from integrating blockchain technology into their games. On the other hand, gaming companies in Japan and South Korea are “leading the way in the adoption of blockchain technology in gaming,” the report says. It points to Sony’s recent NFT-related patents and gaming firm Sega’s announcement of its upcoming blockchain game as evidence of this trend.

A survey of 1,030 Japanese men and women ranging in age from their 20s to 70s cited in the report revealed a promising outlook for the Japanese blockchain gaming industry. It revealed just over 40% of respondents were familiar with blockchain games, and over half of those familiar had a favorable impression of them.

The report also addressed the Web3 industry on a global scale, highlighting that “visual quality and game experience” are “slightly” more important factors for gamers when evaluating a new game over other aspects such as entry price, the number of active users, and game economies. The report also emphasized the significance of airdrops in motivating gamers to try out new games. It was stated that airdrops are considered “an essential factor,” with gamers still expecting to receive them before starting a new game.

It is clear that Asia will play a crucial role in the adoption of blockchain gaming in the coming years. While China’s attitude towards blockchain technology remains unclear, Japan and South Korea have already begun leading the way in adopting blockchain technology in gaming. As the gaming industry continues to evolve, it is likely that blockchain technology will become an increasingly important factor for gamers and game developers alike.


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Japan supports OpenAI amid concerns

OpenAI, the artificial intelligence (AI) company, has received support from Japan amidst a wave of bans by different countries and uncertainties. Japan’s Chief Cabinet Secretary Hirokazu Matsuno announced on April 10 that Japan would consider incorporating AI technology into government systems, including OpenAI’s ChatGPT chatbot, subject to privacy and cybersecurity concerns being addressed.

This announcement followed an alleged data breach on March 20, where Italy’s data protection watchdog temporarily blocked the chatbot on March 31 and directed OpenAI to immediately restrict data processing for Italian users while an investigation is ongoing.

OpenAI CEO, Sam Altman, visited Japan to meet with government officials, including Prime Minister Fumio Kishida. Matsuno expressed his support for OpenAI, stating that the Japanese government would consider adopting its technology if privacy and cybersecurity concerns are addressed.

Altman expressed his enthusiasm about engaging with Japan’s remarkable talent and creating something exceptional for the Japanese people during a press conference in Tokyo. He also mentioned his amazement at the adoption of this technology in Japan.

During his meeting with Kishida, Altman discussed the potential of the technology and how to remove any negative aspects. They also deliberated on how to be cautious about the risks and maximize AI’s benefits for people. OpenAI is considering the possibility of opening an office in Japan and extending Japanese language services.

However, OpenAI is currently being investigated by Canada’s privacy commissioner for allegedly collecting and utilizing personal information without consent. On April 4, the Office of the Privacy Commissioner of Canada announced that the probe was initiated after a complaint from an anonymous individual. Philippe Dufresne, head privacy commissioner, emphasized that his department is closely monitoring AI technology to protect Canadians’ privacy rights.

OpenAI’s technology has been the subject of controversy in different countries. Japan’s expression of support for the company amid these concerns is a positive development for OpenAI’s efforts to expand its operations globally. OpenAI’s commitment to enhancing its models’ proficiency in the Japanese language and its cultural nuances also shows its dedication to providing effective AI services to Japan. However, addressing privacy and cybersecurity concerns is crucial for OpenAI to gain wider acceptance and adoption of its technology.


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Japan’s Web3 Project Team Releases White Paper to Boost Crypto Industry

The Web3 project team of Japan’s ruling Liberal Democratic Party has released a white paper containing suggestions for expanding the country’s cryptocurrency industry. The white paper has been incorporated into the national strategy by Prime Minister Fumio Kishida’s administration.

The Web3 project team aims to bypass the usual bureaucratic processes to formulate regulatory proposals for everything from nonfungible tokens to decentralized autonomous organizations (DAOs). In contrast to other governments seeking to implement consumer protection regulations, Japan is striving to establish a more welcoming atmosphere for cryptocurrency, as many companies have relocated to other countries due to high tax obligations.

The white paper recommends that Japan exhibit leadership during this year’s G7 summit, which will address cryptocurrency issues. The document recommends that the nation focus on the potential benefits of Web3 and establish a prominent stance on technology-agnostic and ethical innovation.

The white paper also recommends additional modifications to tax regulations, acknowledging that a notable exception for token issuers has already been granted. These include tax exemptions for companies that possess tokens issued by other firms that are not meant to be traded in the short term. It suggests enabling self-assessments and allowing investors to carry forward their losses for up to three years and proposes that cryptocurrency should only be taxed when it is converted into fiat currency.

Furthermore, the white paper identifies a pressing concern regarding the absence of accounting standards, which has made it challenging for Web3 enterprises to locate auditors. The document recommends that ministries and agencies assist the Japanese Institute of Certified Public Accountants in creating guidelines. Additionally, it suggests that a DAO law be established, modeled after Japan’s godo kaisha, which is comparable to a limited liability company. It also suggests modifications to the Companies Act and the Financial Instruments and Exchange Act.

The white paper highlights that while the screening process for tokens already in circulation is becoming shorter, the assessment of new tokens issued by foreign entities is still sluggish. It suggests that procedures should be made more transparent, enabling issuers to provide essential information for evaluation.

In 2022, Japan adopted a framework for regulating stablecoins. The new white paper emphasizes the significance of preparing the environment for stablecoin registration and creating a self-regulatory organization. It also suggests developing proposals for yen-backed stablecoins.

Japan’s Web3 project team’s white paper aims to address the challenges faced by the country’s cryptocurrency industry. While Japan has been comparatively more welcoming to cryptocurrencies than other countries, it still faces issues such as high tax obligations and the absence of accounting standards. The white paper recommends several modifications to tax regulations to ease the burden on companies, including tax exemptions for non-traded tokens and carrying forward losses.

The paper also suggests establishing guidelines for accounting standards and creating a DAO law modeled after Japan’s godo kaisha. Furthermore, it highlights the need for more transparent procedures for assessing new tokens issued by foreign entities.

The white paper also emphasizes the significance of preparing the environment for stablecoin registration and developing proposals for yen-backed stablecoins.

Japan’s cryptocurrency industry has the potential to grow further, and the Web3 project team’s white paper is a step towards achieving that goal. The government’s efforts to establish a welcoming atmosphere for cryptocurrencies could encourage more companies to operate in Japan, boosting the country’s economy in the long run.


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Japan’s FSA Warns Binance and Others for Operating Without Registration

Japan’s Financial Services Agency (FSA) has issued a warning letter to several foreign cryptocurrency exchanges, including Binance, Bybit, MEXC Global and Bitget, for conducting business in the country without proper registration, violating the nation’s fund settlement laws. The FSA stated that the listed exchanges had breached Japan’s fund settlement regulations by conducting crypto asset exchange business without proper registration.

This action by the FSA follows a crackdown on unregistered crypto exchanges in the East Asian nation. In 2020, the FSA introduced new regulations requiring crypto exchanges to register with the agency and obtain a license to operate in Japan. However, the regulator clarified that the current list of unregistered traders may not accurately represent the current state of unregistered businesses.

The warning issued to Binance is significant, as it signifies that the cryptocurrency industry in Japan and other nations is facing greater regulatory scrutiny. Unregulated cryptocurrency exchanges pose risks such as fraud, money laundering, and market manipulation, which are concerning regulators more and more.

Although Japan is working on new regulations for the crypto and Web3 sectors, the country has not cracked down on the industry as hard as some other larger economies, such as the United States. However, the FSA’s actions show that it is taking steps to ensure that the cryptocurrency industry in Japan operates within a regulated framework.

Binance, one of the world’s largest cryptocurrency exchanges, has been facing regulatory pressure in various countries. The U.S. Commodity Futures Trading Commission (CFTC) recently sued Binance and its founder, Changpeng Zhao, for regulatory violations. The FSA also issued a formal warning letter to Binance for operating without necessary permissions back in 2021.

In conclusion, the warning letter issued by Japan’s FSA to several foreign cryptocurrency exchanges, including Binance, signifies that the industry is facing greater regulatory scrutiny. As the cryptocurrency industry continues to grow, it is essential for regulators to take steps to ensure that it operates within a regulated framework to mitigate risks and protect investors.


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FTX Japan Users Withdraw Funds Amidst Legal Battle

The legal battle between FTX and Sam Bankman-Fried (SBF) has been ongoing, leaving FTX customers worldwide uncertain about the future of the exchange. In the midst of this, FTX’s subsidiary, Liquid Group, a Japanese crypto trading platform, had to halt withdrawals on Nov. 15, 2022. This was due to Changpeng Zhao, the CEO of Binance, announcing the liquidation of its substantial holdings of FTX Token (FTT), which caused a domino effect and led to the slowdown in fund withdrawals by FTX and its subsidiaries.

FTX Japan users have had to endure the frustration of not being able to access their funds for months. However, on Feb. 21, 2023, FTX Japan resumed withdrawals, which involved moving the funds from the defunct exchange to a Liquid Japan account. This news came as a relief to many investors, and it was soon followed by reports that a popular crypto trader from Japan, Hibiki Trader, had successfully withdrawn all of their funds.

The withdrawal of funds by FTX Japan users is not surprising, considering the uncertainty surrounding the legal battle between FTX and SBF. FTX is a well-known cryptocurrency exchange, and any negative news can impact user trust and confidence. Additionally, the slowdown in fund withdrawals caused by Binance’s liquidation of FTT holdings had a ripple effect on FTX and its subsidiaries, resulting in delayed access to funds for many customers.

It is important to note that the legal battle between FTX and SBF is not related to the slowdown in fund withdrawals or Binance’s liquidation of FTT holdings. The litigation is a separate issue that has been ongoing for some time, and its resolution is still unclear. FTX customers worldwide are eagerly awaiting a conclusion to the legal battle, which will hopefully bring some clarity and stability to the exchange.

In conclusion, the withdrawal of funds by FTX Japan users is a reflection of the impact of negative news and uncertainty in the cryptocurrency market. The legal battle between FTX and SBF and Binance’s liquidation of FTT holdings have added to the existing market volatility and has resulted in delayed access to funds for many FTX customers. It remains to be seen how the legal battle will be resolved and what the future holds for FTX and its customers.


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Japan’s Tech Companies Collaborate to Build Open Metaverse Infrastructure

In Japan, a group of well-known tech companies have agreed to work together to create the Japan Metaverse Economic Zone and an open metaverse infrastructure called Ryugukoku. The agreement aims to spark the next wave of metaverse development and create interoperable tools for users and developers across various platforms. The infrastructure will also serve as a new social infrastructure for enterprise digital transformation.

The companies that have signed the agreement will integrate their respective technologies and services to create Ryugukoku, which includes gamification, fintech, and information and communication technologies. The Japan Metaverse Economic Zone will be an ecosystem that will result from the interoperability between different metaverse services and platforms available to consumers in Japan. The agreement also mentions the future possibility of providing this infrastructure to companies and government agencies outside of Japan.

Japanese regulators have been focusing on the country’s financial technology sector, with the country’s prime minister recognizing decentralized autonomous organizations (DAOs) and non-fungible tokens (NFTs) as a way to support the government’s “Cool Japan” strategy. The exploration of DAOs as governance tools goes back to November 2022 when Japan’s Digital Agency launched its own DAO. Additionally, the Bank of Japan has announced its plans to launch its official central bank digital currency pilot before May 2023.

The collaboration between Japanese tech companies to create an open metaverse infrastructure reflects the increasing interest in the metaverse globally. As countries all over the world join in the rush to get involved, the creation of interoperable tools for users and developers across various platforms will be essential for the growth and development of the metaverse. The Japan Metaverse Economic Zone and Ryugukoku have the potential to become a leading force in the development of the metaverse and could provide a model for other countries looking to build their own metaverse infrastructure.


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FTX Japan users withdraw funds amid litigation

The continuing dispute between FTX and its co-founder, Sam Bankman-Fried (SBF), has been making a stir in the cryptocurrency market, with many consumers left waiting for a resolution to the conflict between the two parties. In the meanwhile, customers of FTX Japan have made the executive decision to take things into their own hands by withdrawing all of their money.

The problems for FTX started in November 2022, when Binance CEO Changpeng Zhao made the announcement that his company would be liquidating its substantial holdings of FTX Token (FTT). This caused a domino effect that slowed down fund withdrawals across FTX and its subsidiaries. FTX Token (FTT) was the cryptocurrency that Binance held. The statement had a particularly negative impact on the Japanese cryptocurrency trading site Liquid Group, which has been controlled by FTX since February 2022. On November 15, withdrawals were fully halted for the platform.

Moving ahead in time to the 21st of February, FTX Japan commenced withdrawals, although the procedure was not an easy one. In order to complete the withdrawals, cash needed to be transferred from the now-defunct FTX Japan exchange onto an account with Liquid Japan. Despite this, some users saw this as a positive turn of events, and as a result, many of them started withdrawing all of their money from FTX Japan.

Hibiki Dealer, a well-known cryptocurrency trader based in Japan, just reported that they were able to effectively remove all of their cash off the site. Concerns have been expressed regarding the steadiness and dependability of cryptocurrency exchanges as a result of the scenario, even if it is unknown how many users have followed suit.

The volatility nature of the cryptocurrency market highlights the significance of effectively managing risk, which is also brought to light by this episode. It is essential for exchanges to have solid risk management procedures in place in order to safeguard not just themselves but also the users of their platform. In spite of this, it is still unknown how FTX will bounce back from this setback, which is particularly concerning given the current legal dispute with SBF that hangs over the firm.

In conclusion, while the decision by FTX Japan to restart withdrawals was a welcome step for its consumers, the scenario has underlined the issues that face crypto exchanges in a market that is very volatile. Cryptocurrency exchanges must place an increased emphasis on risk management and user safety in order to remain competitive in an industry where consumers are increasingly demanding accountability and transparency.


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