Japan is known as one of the most progressive countries as far as cryptocurrencies are concerned.
The country has crypto-friendly policies in place, and many exchanges are operating in the country that have been given approval by Japanese authorities.
Despite having crypto-friendly regulations in place, Japan’s financial regulator reports that there is a drop in the interest that the country’s citizens are showing towards Bitcoin and other cryptocurrencies.
The Financial Services Agency (FSA) reported a 13.9% fall in the number of inquiries about cryptocurrencies they received in the last quarter. The second quarter, which ended on June 30, saw the regulator receive a total of 494 queries about cryptocurrency.
The FSA received 574 inquiries in the first quarter of the year, which ended on the 30th of March.
Reasons for waning interest
The decline in the total number of inquiries received by the FSA can be accounted for by a variety of reasons. Some analysts suggest that inquiries have dropped because several Japanese citizens are already engaged in the trade and use of cryptocurrencies.
As the use of these assets gets more widespread, there are now fewer people looking at their options as far as entering the market goes.
A more plausible explanation would be the recent crackdown on online cryptocurrency exchanges by the FSA. The regulator has instituted action against a number of Bitcoin exchanges that do not comply with the regulatory requirements about KYC information.
Exchanges that have not confirmed the identities of their clients and those that offer anonymous transactions to would-be traders have been placed under scrutiny by the FSA.
This crackdown is part of the regulatory body’s more extensive efforts to counter money laundering that is executed under the guise of Bitcoin trading.
Stifling Bitcoin or creating an environment for proper growth?
There are debates about whether the moves by the FSA are a sign that the regulator is trying to stifle the growth of Bitcoin or whether they are trying to create an environment that will enable the growth and flourishing of the cryptocurrency.
Anthony Pompliano, a renowned Bitcoin evangelist, says that the FSA is bullish about Bitcoin and that the regulator remains a big proponent of the cryptocurrency and the Lightning Network.
Pompliano went on to say that he met with FSA executives, and they want to see Bitcoin succeed in Japan.
Japan wants to be a leader in the crypto industry, according to Pompliano, and hence, it would mean that the FSA is trying to ensure the growth of the sector by clearing out non-compliant exchanges.
Japan’s Financial Services Agency is a big proponent of Bitcoin and Lightning Network.
This is the Agency’s Commissioner (top boss) on the left and the Director of Innovation on the right.
The first country that embraces Bitcoin will have a significant advantage 🙏🏽 pic.twitter.com/cgPkZcZCKQ
— Pomp 🌪 (@APompliano) September 3, 2019