Monex Group CEO: Japan’s Cryptocurrency Exchanges Should be Regulated like Banks
The CEO of online brokerage Monex Group Inc. has said that Japan’s cryptocurrency exchanges should be regulated like the traditional finance system.
On Monday, Monex, Japan’s No. 3 online brokerage in terms of customer accounts, completed its acquisition of Tokyo-based digital currency exchange Coincheck for 3.6 billion yen ($33.6 million), following the exchange’s $530 million hack at the end of January.
Speaking in an interview with Reuters, Oki Matsumoto, CEO of Monex Group Inc., said that as Japan’s exchanges do both matching and custodial services, they are similar to how a bank functions, adding that:
“To someone in the financial industry like myself, it’s common sense that regulations will get stricter.”
The purchase of Coincheck by Monex enables it to enter the cryptocurrency sector, a significant move made by a major financial company. Toshihiko Katsuya, Monex chief operating officer, is expected to take over as the new company president.
At one point there were 32 digital currency exchanges in operation in Japan, 16 of which have received approval from the country’s financial watchdog, the Financial Services Agency (FSA). The remaining 16 have also been given approval while their applications are being reviewed; however, since the Coincheck hack the FSA has applied a firmer hand to how operations are managed. Consequently, due to tighter regulations, several cryptocurrency exchanges have shut down.
Even though rules were introduced last year to ensure that customers’ and company assets remain separate, it seems that the practice hasn’t been defined clearly, Reuters states. On the other hand, with Monex the separation of assets is strictly enforced, with customers’ stocks and assets held with third-party custodians such as trust banks.
Matsumoto’s comments mimic those of Mark Carney, the Governor of the Bank of England (BoE). In March, Carney said at a conference that the cryptocurrency market should be held to the same standards as the financial system, arguing that it ‘would address a major underlap in the regulatory approach.’
Last month, Yahoo Japan announced that it is planning to join the digital currency industry when it acquires a 40 percent stake in the BitARG Exchange Tokyo, an exchange platform on which users can buy and sell Bitcoin. The company also revealed that it’s planning to launch its own exchange based on BitARG’s system in the near future.