Japan and South Korea’s Crypto Control: Law Decoded

Japan’s principal financial regulator, the Financial Services Agency (FSA), has proposed measures to protect users from unlawful transfers to cryptocurrency exchanges, potentially affecting the peer-to-peer transactions market. The FSA recommends halting transfers to crypto exchanges if the sender’s name differs from the account name. While the FSA’s request is not legally binding, it remains to be seen how banks will respond and if this will disrupt the P2P market. Similarly, South Korea’s Financial Intelligence Unit (FIU) plans to tighten scrutiny over cryptocurrencies, implementing a preemptive trading suspension system for suspicious transactions and expanding its crypto team.

In the European Union, the Internal Market and Civil Liberties Committees of the European Parliament have voted to endorse a provisional agreement called the AI Act. This act aims to establish guidelines for artificial intelligence across various industries, including banking, automotive, and security. The regulations will oversee AI models trained on extensive data sets and introduce safeguards, such as copyright protection and prohibitions on AI applications that threaten citizens’ rights.

The Bangko Sentral ng Pilipinas (BSP), the central bank of the Philippines, plans to introduce a wholesale central bank digital currency (CBDC) in the next few years. BSP Governor Eli Remolona revealed that the CBDC would not use blockchain technology but would serve as a digital complement to cash and rival cryptocurrencies. He believes the Philippines can replicate the experiences of Sweden and China in developing CBDCs. Remolona confirmed that the CBDC would be launched within his term as governor, potentially within the next two years.

The National Banking and Securities Commission of Honduras has banned the country’s financial institutions from handling cryptocurrencies, citing concerns about fraud and operational and legal risks. The commission states that users of cryptocurrencies face risks, including the possibility that their acceptance could cease at any time. Crypto assets are also seen as vulnerable to fraud, money laundering, and financing terrorism. Supervised institutions are prohibited from holding derivative instruments based on crypto assets.

These regulatory developments in Japan, South Korea, the EU, the Philippines, and Honduras reflect a growing focus on protecting users from risks associated with cryptocurrencies and ensuring the responsible use of AI technologies. The outcomes of these measures will shape the future of the digital asset and AI industries in these regions.

Cyril Dipalma

Cyril Dipalma

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