There are speculations that the US government is all set to follow Japan’s path and establish regulatory norms for cryptocurrency (virtual coins like bitcoin and Ethereum) trading. Last week, the Japanese government and its financial watchdog the Financial Services Agency (FSA) officially permitted and licensed 11 cryptocurrency exchanges including BitFlyer, the country’s biggest trading platform with more than 800,000 users. Yuzo Kano, the CEO at BitFlyer, said that the formation of practical guidelines for cryptocurrency exchanges and investors by the Japanese government has potential to establish the country as the hub of global trading, development, and innovation.
“Japan has been exploding with demand for both bitcoin trading as well as virtual currency services. The FSA’s approval for bitFlyer to operate as a Registered Virtual Currency Exchange, and the agency’s openness and forward thinking regulation could not come at a better time for the blockchain space,” said Kano.
At the beginning of this year, Bitcoin and security expert Andreas Antonopoulos expressed his opinion at the Blockchain NZ conference held in Auckland, New Zealand. According to him there are two options — governments can just allow the cryptocurrency exchange market to operate without any regulations or work towards creating clear, fair, and robust ecosystem for businesses.
By permitting and licensing cryptocurrency exchanges, the Japanese government has included the digital coin trading market in the mainstream financial domain. Now these companies can do business as legal financial companies within the country. Considering the optimistic outlook of Japanese government the valuation of Bitcoin is increasing along with fueling of trading volume. As of 2nd October, the price of Bitcoin has reached more than $4,470 which signifies the rise in demand for crypto coins.
At an event organized by the Federal Reserve Bank of Philadelphia, Keith Noreika who is currently acting as Comptroller of the Currency, released a statement saying that he is fine with the idea of cryptocurrency exchanges registering as banks. Noreika also informed that he is considering the deployment of a countrywide program to allow cryptocurrency exchanges operate as licensed entities, removing regional licenses such as New York’s BitLicense and establishing a unified regulatory structure for trading to virtual that would help both exchange platforms and investors.
“I wouldn’t be adverse to those people coming in and talking to the [Office of the Comptroller of the Currency] about how a charter could make sense for them. But that is a long process they’d have to go through, and just because you get in the door doesn’t mean you’re going to get out the door on the other side,” said Noreika.
Although regulated and licensed operation of cryptocurrency exchanges in the U.S. can take considerable amount of time, the very fact that the government is open to this concept, serves as an promising indicator of Bitcoin growth. Interesting to note that currently the U.S. follows Japan as the second largest bitcoin exchange market. The government’s consideration of fostering an ecosystem of crypto coins that would be efficient and well-regulated, will be beneficial for both investors and normal consumers.