JAPAN Law and Practice Contributed by: Ken Kawai, Shunsuke Aoki, Takeshi Nagase and Keisuke Hatano, Anderson Mori & Tomotsune
10. Blockchain 10.1 Use of Blockchain in the Financial Services Industry In connection with the use of blockchain tech - nology, the most significant developments in the traditional financial service industry have been those relating to digital securities, NFTs and sta - blecoins. The new regulatory framework has clarified the manner of application of regulations on digital securities (as described in 10.4 Regulation of “Issuers” of Blockchain Assets ). As a result, a considerable number of financial institutions have entered into this new market. For more details on recent developments in this area, see 1.1 Evolution of the Fintech Market . Regulatory discussions and developments on NFTs and NFT platforms in Japan have acceler - ated in tandem with global trends in the field of NFTs. For the legal implications of such develop - ments in Japan, see 2.13 Conjunction of Unreg- ulated and Regulated Products and Services and 10.12 Non-Fungible Tokens (NFTs) . In addition, the FSA introduced new regulations on stablecoins ahead of regulators in other juris - dictions (as described in 1.1 Evolution of the Fintech Market ), thereby clarifying the rules applicable to issuers and intermediaries. Stable - coins to be issued in compliance with the new regulations are expected to be used for settle - ment transactions in respect of digital securi - ties or other types of assets (including NFTs) on blockchain. 10.2 Local Regulators’ Approach to Blockchain Generally speaking, financial regulators in Japan are receptive to fintech innovation — including
acts as an agent or intermediary for the conclu - sion of insurance contracts), it must be regis - tered as an insurance agent or insurance broker under the Insurance Business Act. 8.2 Treatment of Different Types of Insurance In Japan, no distinction is made between differ - ent types of insurance in terms of their treatment by the regulators. 9. Regtech 9.1 Regulation of Regtech Providers There is no regulation in Japan that relates spe - cifically to providers of regtech. Accordingly, such providers are regulated under the existing legal framework, depending on their activities. Regtech is not yet prevalent in Japan; however, the FSA officially announced in its Assessments and Strategic Priorities for 2018 that it would enhance regtech and suptech (supervisory tech - nology) in Japan. One legislative change in this area was the 2018 amendment of the subordi- nate regulations of the APTCP in order to provide for various methods by which e-KYCs may be conducted in Japan. 9.2 Contractual Terms to Assure Performance and Accuracy There have not been many cases in which finan - cial institutions have used regtech services. In addition, there are no laws and regulations or industry practices that require financial institu - tions to stipulate a clause in their contracts with service providers that assures the accuracy of services provided when using a regtech service.
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