Japanese regulator proposes regulation for DeFi. Japan’s top financial regulator has said he may be preparing to try to regulate the decentralized finance (DeFi) sector.
The Financial Conduct Authority (FSA) has issued a call for DeFi players to participate in the department’s “fact-finding investigation”. The FSA wants to “review” its “understanding” of the “real world situation” around the management of “on-chain and off-chain” data “in decentralized financial systems”.
The company asked those who can participate in the plan to express their interest in the form of “donations”, at the end of December 9.
The FSA also said it would make a “briefing” about its plans for what it called a “competition” on Friday December 2. While this may seem encouraging for the DeFi sector, previous evidence suggests that the FSA may indeed want to regulate the sector – but it is important to know more about how it works first.
Japanese Regulator – DeFi
Which Japanese brands want to regulate DeFi? The FSA regulates the crypto industry and effectively gives it carte blanche to make legislative and regulatory changes. It has already imposed some of the world’s toughest regulations on the country’s crypto exchanges, which it began overseeing in 2017. He has published several specific guidelines for stablecoins.
In many cases related to crypto, the FSA has followed a similar principle: it first wants to know more about the company by starting a so-called “study group”, often participating in the private sector. These groups provide information. Therefore, the FSA wants to talk to the players in the area. And, finally, the body often issues guidelines or requests for legal action.
So far, the FSA has little to say about DeFi. But the new “competition” could see it merge with Japanese DeFi players, eventually leading it to seek ways to dominate the sector. Earlier this year, the FSA commissioned consultancy subsidiaries of national technology giant NTT Data to produce a report on the state of DeFi. The result was a 161-page report submitted to the FSA in June.
The national newspaper CoinPost reported that the “discussion” of the FSA is now leading to other issues related to crypto. These terms now seek to “define the criteria used to judge whether digital assets such as non-fungible tokens (NFTs) can be classified as crypto-assets.