Japan plans to amend its Foreign Exchange and Foreign Trade Law to bring crypto exchanges under the purview of laws governing banks, a government official revealed on Monday. The proposed amendment is made to prevent sanctioned countries from taking evasive action using digital assets.
The Chief Cabinet Secretary, Hirokazu Matsuno, told a press conference that The government is planning to introduce a bill to revise foreign exchange laws to include cryptocurrency exchanges.
Fumio Kishida, The country’s newly elected prime minister also supported the revision proposal and called for coordinated action with Western allies to enforce the new laws.
Under the updated laws, crypto exchanges, like banks, will be required to verify and flag transactions associated with sanctioned Russian individuals or groups.
Japan, along with most of its Western allies, has imposed various financial sanctions against Russia following its actions in Ukraine. Earlier this month, the country’s financial regulator also called on crypto exchanges to refrain from allowing transactions for sanctioned parties.
However, a parliamentary amendment to the law would make it a legal obligation for crypto exchanges to block transactions for various sanctioned Russian officials, oligarchs, banks and other institutions.
The reason for the concern that Russia may attempt to circumvent sanctions using cryptocurrencies stems from the country’s growing interest in the crypto market and recent comments made by the country’s ministers.
The financial sanctions imposed on Russia have forced it to look for alternative payment systems and methods to access the international commercial market. Although speculation about the possible use of digital assets to circumvent economic sanctions has been one of the most discussed topics of debate, experts have dismissed such concerns as “totally unfounded”.
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