Japan’s two cryptocurrency associations have reportedly decided to merge in order to restore trust in the industry and accelerate self-imposed rules. Once approved by the Japanese financial regulator, the new organization will have the power to set penalties for breaches of self-regulation.
Two Crypto Associations Merging
Japan currently has two cryptocurrency industry associations: the Japan Blockchain Association (JBA) and the Japan Cryptocurrency Business Association (JCBA). The former is headed by Bitflyer CEO, Yuzo Kano, and has a total of 88 members, while the latter has a total of 154 members, according to Minkabu publication.
The two organizations have reportedly been in talks to merge after the hack of one of the country’s largest exchanges, Coincheck, where 58 billion yen worth on the cryptocurrency NEM were stolen. They “are hurried to restore trust in the industry,” Forbes Japan reported.
They “will be integrated to establish a new self-regulating organization,” to focus on areas such as safety management system and compensation of customer assets, the news outlet added. In addition, the new entity will also focus on the reliability of crypto exchanges that have already been approved by the Japanese Financial Services Agency (FSA). Currently, there are 16 approved exchanges and 16 under review, including Coincheck.
On Thursday, Nikkei reported:
Two cryptocurrency industry groups in Japan [JBA and JCBA] have agreed to merge in an effort to accelerate the establishment of voluntary regulations and regain public trust in the aftermath of a massive virtual currency heist.
Set to launch on April 1, “The new organization’s chairman will likely be JCBA Chairman Taizen Okuyama, president of Money Partners Group,” the news outlet detailed, adding that Kano is “expected to become the self-regulatory body’s vice chairman.”
Commenting on the news of its merger with the JBA, the JCBA issued a statement on Thursday, stating that no details have been decided at this time.
The new entity will need the approval of the FSA. Under Japan’s revised payment services law which went into effect in April of last year, cryptocurrency operators are allowed to form a self-regulatory organization. They can “set industry rules, conduct investigations on members, and impose punishment,” the Japan Times elaborated.
However, the FSA previously “refused to allow two self-regulatory bodies, urging the industry to create a unified organization by merging the JBA and the JCBA,” Nikkei explained on Thursday, adding that:
Once the new body is approved by the agency, it will gain the power to set penalties for breaches of its self-imposed rules. This should also help address calls by banks and other businesses in the conventional financial industry for virtual currency businesses to establish a robust self-regulatory regime.
Do you think the merger will help the crypto industry gain more of the public’s trust? Let us know in the comments section below.
Images courtesy of Shutterstock.
Author: Kevin Helms