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Japan is stepping up its attempts to regulate digital currencies and stablecoins in order to catch up with its peers. Even as the Finance Ministry boosts its workforce to better monitor the rapidly developing industry, the country’s financial services regulator has reportedly established a new unit to oversee the industry.

Japan was a forerunner in digital currency rules, being one of the first countries to clearly define the role of digital currencies in its financial system. On the other hand, regulators in the country believe they have slipped behind their peers and are working to catch up.

According to insiders inside the country’s financial sector, many government arms are boosting their focus on digital currencies.

The Financial Services Agency, Japan’s banking, exchanges, and insurance watchdog, is one among them. According to sources who spoke to Reuters, the FSA has created a new unit to supervise digital currency regulation.

Decentralized finance, a sector that has seen explosive growth as well as an unpleasant rise in scams and criminality, would be overseen by the new unit.

The Ministry of Finance of Japan is also stepping up its oversight of the digital currency business. One of its initiatives entails boosting manpower in an existing division to oversee digital money better. According to reports, the ministry will submit a budget proposal for the additional personnel by next month.

  • “Japan can no longer leave things unattended with global developments over digital currencies moving so rapidly,” one official commented.

The two organizations are collaborating with the Bank of Japan, which is developing a digital yen. The CBDC, according to the central bank, will provide the public with a safer alternative to digital currencies and stablecoins.

Japan has joined a growing number of other regulators worldwide that are concerned about the impact of digital currencies on financial stability. China is at the forefront of this effort, cracking down on all aspects of digital currencies, from block reward miners to over-the-counter trading sites.

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