Japan plans to amend laws to control exchanges for better enforcement of sanctions

Japan, which recently said that it will follow the U.S. in regulating stablecoins, is known for its strict and structured crypto regulations. A Japanese government official has revealed that the government has planned to modify its Foreign Exchange and Foreign Trade Act to control exchanges under the purview of laws that regulate banks. The proposed amendments are the result of the authority’s plans to prevent countries like Russia from evading sanctions using digital assets.

During a press conference, Hirokazu Matsuno, the chief cabinet secretary said that the government is planning to introduce a bill to amend the Foreign exchange rules to include crypto exchange platforms.

The newly-elected prime minister of Japan, Fumio Kishida, also backed the proposed revision and asked for coordinated enforcement efforts with Western allies.

Crypto exchanges, like banks, will be compelled to check and flag transactions involving sanctioned Russian individuals or organizations under the amended foreign exchange legislation.

Japan and its Western allies tighten their stance toward Russia

Following Russia’s operations in Ukraine, Japan, along with the majority of its Western allies, imposed various financial sanctions on the country. The country’s financial regulatory body also urged crypto exchanges to stop facilitating transactions for sanctioned targets earlier this month.

A parliamentary amendment to the law, on the other hand, would make it mandatory for cryptocurrency exchange platforms to restrict transactions for sanctioned Russian officials, oligarchs, banks, and other institutions.

The country’s rising interest in the crypto market, as well as recent comments made by Russian ministers, are the source of fear that Russia may try to avoid sanctions by using crypto.

Recently, Russia said that it is fine with accepting Bitcoin in return for natural gas for “friendly” countries but would only accept ruble from “unfriendly” ones. Interestingly, the move comes amid the Central Bank of Russia’s constant stubbornness in banning crypto trading and mining in the nation.