The Diet enacted a bill on Wednesday to regulate operators of virtual currency exchanges in order to help ensure better protection of users.
The bill to revise the fund settlement law was approved at the day’s plenary meeting of the House of Councilors. The amendment passed the House of Representatives in late April.
Under the revised law, virtual currency exchange operators are required to register with the Financial Services Agency, while the agency is authorized to conduct on-site inspections and issue administrative orders as needed.
The law’s revision comes more than two years after Mt. Gox, a Tokyo-based operator of a bitcoin exchange, went bust in February 2014. Before the firm’s bankruptcy, the exchange was the largest for a virtual currency in the world.
Operators have welcomed the new regulations, as they will improve trust in the industry and virtual currencies.
They also said when the legal status of the virtual currencies is established, more firms, including big conservative Japanese firms, will enter the market to energize the industry and facilitate the use of cryptocurrencies, such as bitcoin.
The new rule defines virtual currencies as “asset-like values” that can be used in making payments and can be transferred digitally.
The revised law will go into effect within a year of its promulgation.
Measures against terrorist financing, including increased monitoring of virtual currencies and other new financial settlement methods, will likely be high on the agenda at the two-day summit of the Group of Seven major countries and the European Union in Mie Prefecture from Thursday.
Also Wednesday, a bill to amend the banking business law, which is aimed at encouraging Japanese banks to strengthen their consolidated operations, was enacted at the Upper House plenary meeting, after clearing the Lower House late last month.
The revised legislation eases restrictions on investment in nonfinancial businesses by banks and bank-holding companies, thereby enabling them to acquire information technology firms and support their fintech services.