The Japanese House of Representatives has adopted the Payment Services Act and the Financial Instruments and Exchange Act. The Payment Services Act (PSA):
Changes the term ‘Virtual Currency’ for ‘Crypto Asset’; Tightens restrictions on custodian service providers i.e new AML/CTF and registration requirements; Requires crypto exchanges operating in Japan will have to manage users’ money separately from their own cash flows.
The Financial Instruments and Exchange Act (FIEA): Introduces the concept of electronically recorded transferable rights (ERTRs) to define that initial coin offerings (ICOs) and security token offerings (STOs) are regulated under the FIEA. ERTRs refer to tokens issued in the expectations of profits (i.e., security tokens); Extends scope of FIEA to crypto asset derivatives.