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According to current laws, crypto exchanges in Japan must undergo a months-long screening procedure before listing tiny or medium coins.

According to a source from Bloomberg, the Japan Virtual and Crypto Assets Exchange Association (JVCEA) – the country’s watchdog in charge of monitoring digital coin listings on local exchanges – would relax its screening procedure.

There will be no more token screening

According to sources familiar with the situation, the self-regulatory organization – JVCEA – will change away from its current concentration on the listing process. Instead, it would regulate the industry by policing assets after they have been listed.

If concerns occur, member exchanges with hard currencies trading on their systems may be forced to delist them. Moreover, notwithstanding the absence of the screening procedure, trading platforms will be legally compelled to submit any listing intentions to authorities.

According to the source, the new regulations will not apply to initial coin offerings (ICOs), and a final decision is likely before the end of the year.

The new regulation was implemented after Prime Minister Fumio Kishida’s government criticized the old screening procedure, claiming that it has hampered the growth of local crypto enterprises owing to weak restrictions. However, he stressed that the organization must adhere to user protection rules.

JVCEA adopted a new policy earlier this year that allows member exchanges to add a selection of “green-listed” cryptocurrencies without screening requirements. Previously, the listing process may take six months or longer, which crypto companies said slowed the industry’s growth.

GMO Coin Inc, one of the top crypto exchanges in Japan, only has 21 cryptocurrencies compared to US-based exchanges like Coinbase Global, which offers over 100 assets to its consumers. Local exchanges struggled to recruit clients in the face of heavy competition from their overseas rivals since they had considerably fewer currencies on their platforms.

A set of rules governs stablecoins

Following the catastrophe of Terra, the Japanese Parliament is said to have established laws requiring stablecoins to be tied to either the country’s national currency (the yen) or another legal tender to be classified as such.

The decision was perceived as a reaction to the mismanaged algorithmic stablecoin Terra, which has no underlying assets in reserve connected to fiat currencies and has been a fiasco. The Japanese government believed that such an endeavor would increase user safety.

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