Author: Joseph Young Translated by: Clover
IndieSquare co-founder and Japanese cryptocurrency researcher Koji Higashi revealed that Japan (the world’s largest bitcoin market in terms of daily trading volume) has developed friendly and relaxed regulations for bitcoin companies and investors.
However, while the Japanese government has legalized Bitcoin as a currency and recognized it as a legitimate method of payment, other small alternative cryptocurrencies (altcoins) currently enjoy the same treatment as Bitcoin. Higashi emphasized that the adequacy of the Japanese government’s consumer protection measures is debatable, as the average consumer can now consider small-scale altcoins as an alternative to Bitcoin.
Higashi Shado:
“In general, Japan’s regulation is arguably getting looser, giving exchanges more freedom, but the effectiveness of its consumer protections is debatable. Today the industry feels more like a top-down financial industry ( top-down) management strategy, and technology has not kept pace with speculative demand.”
Fundamentally, Higashi believes that the degree of freedom the Japanese government provides to Japan’s cryptocurrency exchange market, as well as trading platforms, has driven Japanese consumers to believe that any currency listed on a regulated exchange is a legitimate alternative to Bitcoin Taste.
Higashi charge display:
“The following example should help you understand how loose the official definition of cryptocurrencies is. Pepecash, like Bitcoin, is classified as a 'first-in-class' cryptocurrency that can be legally traded and sold on licensed exchanges.”
But pushing a relatively unknown and small-scale altcoin like Pepecash (not included in CoinMarketCap's top 100 cryptocurrencies list) would mislead investors into believing that Pepecash is a major cryptocurrency and that it is Bitcoin altcoins, but in fact it is not.
Isn't freedom great for the market?
Conversely, the freedom the Japanese government provides to local cryptocurrency exchanges may be beneficial to Japan’s bitcoin and cryptocurrency industry, as it allows markets and consumers to decide whether certain cryptocurrencies are legal or not.
Markets such as the United States have strictly enforced a series of regulations such as "know your customer (KYC)" and anti-money laundering (AML) policies, and even forced many businesses to go out of business. For example, New York State’s Bitlicense regulatory framework has forced the state’s three major cryptocurrency exchanges ShapeShift, Bitfinex, and Kraken to withdraw from the region due to inefficiencies and unfriendly regulations.
Like initial coin offering (ICO) tokens, the global cryptocurrency market itself must mature so that investors in it can differentiate tokens looking to make quick bucks from legitimate projects, altcoins, and cryptocurrencies to make the right decision.
Strict regulation of a fast-growing market like Bitcoin could slow the exponential growth of the entire cryptocurrency market. In this sense, the Japanese government's friendly and flexible regulation of cryptocurrency companies and investors is very beneficial.
While it can be argued that the Japanese market lacks regulations to protect investors, as highlighted by Higashi, it is important to recognize that it is precisely because of its pragmatic regulation that Japan is today the largest Bitcoin market in the world. At the same time, Japan is the only market that has implemented a nationwide license for cryptocurrency exchanges in order to enable the market to function stably.
This article only represents the author's personal opinion, does not represent the position of the blockchain pencil, does not constitute investment advice, and the content is for reference only.
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