Japanese regulators are planning to approve the Cryptocurrency Exchange Traded Funds (ETFs), instead of cryptocurrency derivatives such as Bitcoin Futures and Bitcoin Options.
According to a recent Bloomberg report, the Financial Service Agency (FSA) of Japan is considering ETFs which tracks digital assets. The decision to bar cryptocurrency futures is a setback for the crypto investors who are betting on institutional demand which could help to end a year-long sell-off, especially after the security breach which took place at the Japanese crypto exchange Coincheck.
An anonymous source which is familiar to the working of FSA said that,
“Last month, the regulator decided against pursuing revisions to the nation’s securities law which would have allowed crypto futures and options to be listed on major financial exchanges after concluding that such products would achieve little besides stoke speculation,”
The regulators put aside the plans for crypto futures and to revise the security laws. The financial watchdog explained that the introduction of such products will only increase the speculation. Countries such as the United States have already listed futures which track Bitcoin. Before making the decision the financial watchdogs to investigate why the regulatory bodies allowed the Coincheck hack to happen.
Apart from not approving the crypto derivatives, the FSA also planned to give more power to the self-regulatory bodies. The FSA has already granted self-regulatory organization (SRO) status to the Japan Virtual Currency Exchange Association (JVCEA) under the Payment Services Act. The FSA appealed the members to join the certified regulatory bodies. The regulators also said that crypto exchanges have to do a lot more to strengthen their maintenance of customer property.
The FSA has also introduced new regulations for Initial Coin Offerings (ICO). The agency stated that,
“To introduce the regulations, it plans to submit bills to revise the financial instruments and exchange law and the payment services law to next year’s ordinary parliamentary session starting in January.”
The FSA intends to place a majority of ICOs under the security law of the country.