Japan has offered new life to cryptocurrencies by unveiling plans to allow the crypto industry to become self regulatory. This move is expected to help the industry in cleansing itself from scams and other fraudulent acts that are prevalent in the cryptocurrency industry.
In a statement released by Japan’s Financial Services Agency(FSA), the anticipated self regulatory system is in agreement with the recommendation of the Japanese Virtual Currency Exchange Association (JVCEA).
Improved Stability Expected
This development will transfer the responsibility of developing guidelines and the regulatory framework of crypto related activities to JVCEA. More stability is expected in the rules and regulations that will be setup by the association since it is already a part of the industry.
The development will also enable the creation of an independent body where members, especially exchanges can report and have their problems resolved. Also, member exchanges, of which includes all 16 of them currently operating in Japan will be able to receive support from the Japanese financial department.
The industry is therefore technically expected to be governed by experienced participants, rather than novices, or regulators that do not really understand crypto. However, there are still concerns as to how this new system will function without neutralizing the decentralized characteristics of the crypto ecosystem. As it stands, cryptocurrency abhors control.
Regulation Is Imminent
No matter the reluctance of cryptocurrency enthusiasts towards any form of regulatory processes, the industry is yet to grow up to a stand-alone ecosystem. The level of adoption for cryptocurrencies is still very far from what it users expect in the future. While there are cases of merchants and other forms of retailers accepting cryptocurrency as a medium of payment, the relative volume is still very small.
This low level of adoption can be attributed to several reasons. These include low level of awareness, inadequate crypto education, high market volatility and the fear of the unknown. However, with the increasing rate of innovations going on within the industry, it is apparent that awareness will improve drastically in the near future, and so would adoption.
Until these issues as mentioned above are addressed, the subject of regulation will remain a key discussion within the cryptocurrency industry. Therefore, at this point the question isn’t whether regulation is necessary for cryptocurrency, but to what extent should the industry be regulated.
Whatever the outcome, it is established that there is an ongoing revolution in cyber technology. In the near future, the methods of exchanging value will be redefined, just like the internet redefined information transfer.