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Japan plans to tighten crypto exchange regulation to enforce sanctions

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A government official said on Monday that Japan aims to revise its Foreign Exchange and Foreign Trade Act to put cryptocurrency exchanges under banking restrictions. The proposed amendment aims to prevent sanctioned countries from utilising digital assets to evade sanctions.

In a news conference, Chief Cabinet Secretary Hirokazu Matsuno stated that the government intends to draught legislation. In order to update foreign exchange laws to cover cryptocurrency exchanges.

The proposed modification was also endorsed by Fumio Kishida, the country’s newly elected prime minister. Who called for coordinated enforcement efforts with Western allies.

Crypto exchanges, like banks, will have to check and flag transactions involving sanctioned Russian persons or entities. Under the amended foreign exchange legislation.

Slew of financial sanctions on Russia

Following Russia’s actions in Ukraine, Japan, along with the majority of its Western partners, imposed a slew of financial sanctions on the country. The country’s financial regulatory body also urged crypto exchanges not to allow transactions for sanctioned targets earlier this month.

A parliamentary modification to the law, on the other hand, would make it legal for crypto exchanges. In order to block transactions for sanctioned Russian officials, oligarchs, banks, and other institutions.

Russia’s rising interest in the crypto market, as well as recent comments made by Russian ministers, have raised concerns about the country attempting to escape sanctions by using cryptocurrencies.

Russia had to seek alternative payment systems and ways to gain access to the world commerce market. As a result of the financial sanctions imposed on it. One of the most hotly debated themes has been the potential use of digital assets to circumvent trade penalties. However, experts have dismissed such fears as “completely unjustified.”

ECB president calls for crypto regulation in response to Russia potentially evading sanctions

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