31 May 2019 | AtoZ Markets - The Japanese Financial Services Agency (FSA) in the comments on the financial committee of the upper chamber of the National Diet on May 30 showed a cautious approach to exchange-traded funds (ETFs) based on cryptocurrency.
Japan discusses crypto ETF’s
During the financial committee of the upper chamber of the National Diet, local politician Takeshi Fujimaki expressed his hope of soon crypto ETF’s approval in the United States by the Securities and Exchange Commission (SEC).
Fujimaki pointed both on positive and negative statements from SEC Commissioner Esther Pierce. The Japanese politician then noted that approval of the exchange-traded funds (ETFs) based on crypto would be an important event and Japan should not lag behind other countries in this regard.
Fujimaki during the discussion of ETF’s adoption in Japan also made few remarks regarding hack incidents. The politician noted, the case of ETFs — crypto assets would be entrusted to banks and kept by custodians. He outlined that the introduction of such an asset would result in growth for the market by making institutional investment easier, resulting in lower volatility.
Japanese regulators remain strict about crypto
However, the representative of the FSA reportedly showed opposite views regarding crypto ETF’s and cryptos overall. The Japanese regulator said that such cryptocurrency as bitcoins (BTC) do not have intrinsic value, and this can lead to intolerable price volatility.
Japan has one of the most strict regulations regarding crypto. The rules were implemented after a series of high-profile hacking exchanges, but the country now has one of the best systems in place.
As previously reported, the House of Representatives of Japan adopted a new crypto-regulation in the upper house of the National Sejm.
It is also worth to mention, that Tokyo plans to tighten the crypto exchanges’ oversight on cold wallets to mitigate risks of any thefts. It has also renewed rules for crypto margin trading and set the standards as per the existing forex trading industry.
In April, the Minister of Finance of Japan and Deputy Prime Minister Taro Aso called on journalists to stop using the term “virtual currencies” and switch to the newly proposed crypto active legal name.
The global attitude toward crypto ETF’s
The U.S. SEC always showed concerns over market manipulation, liquidity and other breaches pertinent to the financial sector, with regard to its chronic objection to Bitcoin ETF applications.
Last March, the SEC delayed its decision on the bitcoin (BTC) exchange-traded fund (ETF) of Bitwise Asset Management application for the first time, saying “The Commission finds it appropriate to designate a longer period within which to take action on the proposed rule change so that it has sufficient time to consider the proposed rule change,”
In February 2018, Bitwise filed for an ETF for the first time, under the condition that the SEC would reach a decision in 45 days.
In May 2019, looking over a new bitcoin exchange-traded fund (ETF) application, the U.S. Securities and Exchange Commission (SEC) decided to adjourn its decision on it again.
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