The Japanese regulator, the Financial Services Agency (FSA), has commented that a solution needs to be found in order to find balance between consumer protection and technological innovation as the blockchain development grows.
Toshihide Endo, the Deputy Director-General of the Japanese FSA’s Supervisory Bureau, has espoused a need to overwatch the blockchain industry as it expands in order to minimize government intervention.
The FSA has been performing on-site inspections and earlier this month revealed that investor protection is at the forefront of the various exchanges concerns, but as the commissioner said, the government has “no intention to curb excessively”.
During the FSA inspections a report found that the exchange’s internal control systems were experiencing lag, notable due the rapid increase of transactions. The Japan Virtual Currency Exchange Association (JVCEA) has echoed the sentiment of the FSA for trading limits.
The JVCEA, which has submitted an application to the FSA to become cryptocurrency single self-regulatory body in Japan, had proposed a limit of transactions earlier this month by recommending its own “appropriate regulations” for expansion by suggesting new operational rules for exchanges, such as placing privacy coin listings and insider trading under the regulations.
Another rule for stemming the transaction increase suggested by JVCEA was to regulate trading caps and impose restrictions to certain age group such as the elderly and the young. The JVCEA has also suggested that margin trading should be limited to four times the customers deposit. At the time, cryptocurrency investors can borrow with no limits.