JAPAN Law and Practice Contributed by: Ken Kawai, Shunsuke Aoki, Takeshi Nagase and Keisuke Hatano, Anderson Mori & Tomotsune
“Issuers” of Blockchain Assets for regulations applicable to issuers of PPIs. Non-Fungible Tokens (NFTs) NFTs are irreplaceable tokens minted on a blockchain. The applicability of the PSA to an NFT depends on whether such NFT constitutes a crypto-asset. However, NFT platforms that enable the conduct of NFT-related transactions are not subject to financial regulation. See 2.13 Conjunction of Unregulated and Regulated Products and Services and 10.12 Non-Fungible Tokens (NFTs) . Digital Securities Tokens issued on blockchain that represent any securities as defined in the FIEA would be regu - lated under FIEA as described in 10.1 Use of Blockchain in the Financial Services Industry and 10.4 Regulation of “Issuers” of Blockchain Assets . Stablecoins Stablecoins that are redeemable for fiat curren - cies (fiat-backed stablecoins) are regulated as EPIs, as noted in 1.1 Evolution of the Fintech Market . 10.4 Regulation of “Issuers” of Blockchain Assets Regulation on Issuers of Crypto-Assets See 10.11 Virtual Currencies . Regulation on Issuers of Prepaid Payment Instruments An issuer of PPIs is required to comply with applicable rules under the PSA. If a PPI may only be used for payments to the issuer for its goods or services, that issuer will not be required to register under the PSA; however, it must still comply with certain notice requirements. By contrast, an issuer of PPIs that may be used not
those using blockchain and technology-driven new entrants in the regulated financial services markets — and are actively participating in dis - cussions taking place in this industry. However, various consumer protection issues have arisen in connection with the Japanese fintech industry. These have resulted in a deci - sion made by regulators to strengthen the regu - lations governing emerging fintech businesses in order to address new risks to consumers arising from the new services. Notably, the regulatory framework for crypto-assets was amended to enhance customer protection by introducing stricter regulations. This was in response to a major incident in January 2018 in which one of the largest crypto-asset exchanges in Japan announced it had lost approximately USD530 million worth of crypto-assets after a hacking attack on its network. The new regulatory frame - work entered into force on 1 May 2020. 10.3 Classification of Blockchain Assets In Japan, regulations applicable to certain block - chain assets (ie, tokens issued on blockchain) may vary, depending on the nature of those assets (as per the following classifications). Crypto-Assets The authors believe that a large proportion of tokens issued on blockchain constitute crypto- assets as defined in the PSA. See 10.11 Virtual Currencies for regulations applicable to issuers of crypto-assets. Prepaid Payment Instruments Tokens issued on blockchain that are similar to prepaid cards, in that the tokens may be used as consideration for goods or services provided by token issuers, may be regarded as PPIs as defined under the PSA. See 10.4 Regulation of
415 CHAMBERS.COM
Powered by FlippingBook