Japan: Building a regulated Cryptocurrency payments network

Japan is said to be piloting an international cryptocurrency payments network. According to a Reuters report the project is similar to the SWIFT network used by many banks. This is one of the steps taken by the authorities to fight against the serious problem of money laundering which has been plaguing the nation’s economy for a long time. This move has been sanctioned by the Financial Action Task Force (FATF) last month.

Japan is said to be piloting an international cryptocurrency payments network. According to a Reuters report, the project is similar to the SWIFT network used by many banks. This is one of the steps taken by the authorities to fight against the serious problem of money laundering which has been plaguing the nation’s economy for a long time. This move has been sanctioned by the Financial Action Task Force (FATF) last month.

The development would be monitored by the inter-governmental Financial Action Task Force and Japan will be cooperating with other countries as well. It is, however, unclear how this cryptocurrency network will be functioning. But as per reports, it should be similar to SWIFT, which is an international payments messaging system used by banks to send money all over the world.

The initiative was proposed by Japan’s Ministry of Finance and the Financial Services Agency (FSA) regulator. Both the agencies have declined to comment any further details when contacted.

 Japan has previously been very strict about cryptocurrency regulations and is also the first country in the world to regulate cryptocurrency exchanges on a national level. They had been strictly examining cryptocurrency exchanges as the host of the June, G20 group of nations summit. The nation also set up a committee to discuss regulatory issues related to Facebook’s Libra prior to the G7 meeting.

The fact however still remains unclear as to how the people will react to a regulated crypto payments network, as the main attractive part of cryptocurrencies is its unregulated nature. This the part every authority is worried about because previously Japan has suffered a number of major hacks of crypto exchanges, these include the infamous Mt.Gox, and the popular exchange Coincheck. These security breaches are one of the sole reasons why Japan is so active about regulating cryptocurrency in the nation.