The Japanese Financial Services Agency (FSA) has granted regulatory licenses to four new exchanges – Xtheta Corp., Tokyo Bitcoin Exchange Co. Ltd., FTT Corp., and Bit Arg Exchange Tokyo Co. Ltd. – bringing the total of legally recognized cryptocurrency exchanges in the country to fifteen. Of the four new exchanges, only Xtheta Corp. has been granted the right to trade cryptocurrencies other than Bitcoin.
The licenses are a part of the Virtual Currency Act, which also granted Bitcoin and Ethereum legal status as means-of-payment in Japan in April of this year. Under the act, exchanges were required to apply for legal status in order to continue operating. In order to be eligible for licensing, exchanges had to meet high requirements for cybersecurity and the verification of user identities.
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Competition is Heating Up
The addition of the four new crypto exchanges means that there will be an increased level of competition in the Japanese cryptocurrency trading market. More exchanges are reportedly undergoing the process of legal registration, although 12 exchanges that applied were reportedly rejected because of their failure to adequately meet the standards outlined in the VCA. According to CoinTelegraph, the rejected exchanges were required to shut down their operations.
Japan’s Virtual Currency Act is often cited as one of the major causes of the first big crypto boom that continued through May and June of 2017, sending both coins to unprecedented heights. While some of the world’s governments have recently cracked down hard on cryptocurrency with outright bans, many of the regulatory moves that governments have had a positive effect on the crypto markets.
In many cases, cryptocurrency-focused legislation makes otherwise wary investors more willing to participate in the crypto space. In May of this year, Quoine CEO and co-founder Mike Kayamori said: “Normally, regulation is not a good thing, but for cryptocurrencies regulation is a blessing.” In Japan’s case, this statement still rings true.