In a significant move for the digital asset industry, Japan's Financial Services Agency (FSA) has approved four additional cryptocurrency exchanges to operate legally within the country. This latest approval round, which concluded in early December, follows an initial wave of approvals granted to 11 exchanges back in September.
This development brings the total number of fully licensed cryptocurrency exchanges in Japan to 15, reinforcing the nation's position as a leader in establishing clear regulatory frameworks for digital currencies.
Details of the Newly Approved Exchanges
The FSA has officially published the details of these four newly authorized platforms on its website. The approved entities are all relatively new market entrants:
- Tokyo Bitcoin Exchange Co., Ltd.
- Bit Arg Exchange Tokyo Co., Ltd.
- FTT Corporation
- Xtheta Corporation
According to the official FSA listing, three of these four exchanges are approved specifically for trading Bitcoin (BTC). The fourth exchange, Xtheta Corporation, received a broader license. It is approved to handle multiple cryptocurrencies, including Ethereum (ETH), Bitcoin Cash (BCH), Ripple (XRP), Litecoin (LTC), Ethereum Classic (ETC), NEM (XEM), Monacoin, and Counterparty tokens.
The Legal Framework: Japan's Payment Services Act
The approval process is mandated by Japan's revised Payment Services Act, which came into effect on April 1st of this year. This landmark legislation officially recognized Bitcoin as a legal form of payment within Japan. A core requirement of the law is that all cryptocurrency exchange platforms must register with and be approved by the FSA to operate legally.
The FSA has clarified that only digital currencies handled by these 15 approved exchanges are formally recognized under the definitions laid out in the Funds Settlement Law. This provides a crucial layer of consumer protection and legitimacy for users trading on these platforms.
Ongoing Reviews and the Application Process
The FSA's work is far from over. Reports from late September, notably from Nikkei, indicated that approximately 17 companies were under review by the agency at that time. Of those, 12 companies were unable to meet the FSA's stringent registration requirements and subsequently ceased their exchange operations.
One of the most prominent applicants still under review is Coincheck, which is considered Japan's second-largest Bitcoin exchange. In a statement released recently, Coincheck clarified that it submitted its application for a "Virtual Currency Exchange" registration on September 13th and confirmed that its status is still "under review." The exchange has assured its customers that it will continue to provide services as usual during this process.
This ongoing scrutiny reflects the FSA's cautious and thorough approach to regulating the cryptocurrency market, ensuring that only compliant and secure operations receive official approval.
Regulatory Outlook and ICOs
Last month, the FSA released a comprehensive document outlining its administrative policies concerning cryptocurrencies and Initial Coin Offerings (ICOs). This document provides further clarity on how cryptocurrency exchanges will be monitored and regulated, building upon the framework established by the earlier approvals.
This proactive stance demonstrates Japan's commitment to fostering a safe and innovative environment for cryptocurrency development while implementing strong measures to protect investors and maintain market integrity. For those looking to understand the full scope of trading options and regulatory compliance, it's essential to stay informed on the latest approvals. 👉 Explore licensed trading platforms
Frequently Asked Questions
What does FSA approval mean for a cryptocurrency exchange in Japan?
FSA approval means the exchange has met strict operational, security, and financial standards set by Japan's financial regulator. It can operate legally, offering customers a government-recognized level of protection for their funds and transactions.
Which cryptocurrencies are legally tradable on Japanese exchanges?
This depends on the specific license granted to each exchange. While Bitcoin is universally traded, other coins like Ethereum, Ripple, and Litecoin require additional approval. The FSA's website lists which assets each licensed exchange is permitted to handle.
Can unlicensed exchanges still operate in Japan?
No. Following the enactment of the Payment Services Act, it is illegal for any exchange to operate without FSA registration. Several unregistered exchanges have already been ordered to cease operations.
Is my money safe on a licensed Japanese exchange?
Licensed exchanges are subject to stringent cybersecurity and capital reserve requirements mandated by the FSA, significantly enhancing user fund safety compared to unregulated platforms. However, all investments carry inherent risk.
How does Japan's approach to crypto regulation compare to other countries?
Japan is widely regarded as a global leader in establishing clear, comprehensive cryptocurrency regulations. Its licensing system provides a model that other nations are observing and considering as they develop their own regulatory frameworks.
What should I do if I use an exchange that is still under review?
If you use an exchange like Coincheck that is currently under review, it has been allowed to continue operating while its application is processed. You should monitor official announcements from both the exchange and the FSA for any updates on its licensing status.