The Journal The Authority on Global Business in Japan

Financial Services Agency
Considering restrictions on cryptocurrencies

A study group chaired by Gakushuin University Professor Hideki Kanda met for the first time in early April to discuss cryptocurrency and problems with current laws. Debate about initial coin offerings, through which companies procure funding by issuing their own cryptocurrency, has been deepening. The study group plans to hold regularly scheduled meetings to discuss matters such as establishing a structure for setting market rules and revising the system.

At the initial meeting, the Financial Services Agency (FSA) and crypto­currency industry groups touched on pending issues and the current situation. Bitcoin and five other major cryptocurrencies led the rapid growth of the market in fiscal 2017 as the total amount of trading in Japan swelled to about ¥69 trillion—a twentyfold increase over the previous fiscal year’s figure. The amount traded on margin, utilizing small amounts of capital to realize major gains, rose to about ¥56.4 trillion.

Some attendees expressed skepticism about the actual circumstances. An executive at one of the major exchanges said, “Regarding the overheating of margin trading for speculative purposes, we have been debating the lowering of the margin ratio.”

Opinions were also offered on such topics as tougher restrictions for registration applications lodged by presumptive traders and combating money laundering by means of tighter rules that are equivalent to those currently applied to banks.

Other concerns related to cryptocurrency trading include the current lack of enforce­ment of rules to prevent insider trading prior to public offerings of securities and forms of fraud such as the spreading of rumors.

Traders also see benefit in the govern­ment action. “To ensure the soundness of the market, we would like the FSA to take the lead in setting up rules,” one trader said.
Ministry of Economy, Trade and Industry
Greater assistance for small and medium-sized businesses

On April 19, the Consortium for New Export Nation, an organization of govern­ment entities and private organizations attached to the Ministry of Economy, Trade and Industry (METI), held a meeting at which it was announced that support for businesses intending to start operations abroad would be significantly boosted.

To harness high-quality human resources from outside Japan, a number of counters will be set up in 2018 based on factors such as type of industry. These will serve as a centralized platform for matching candidates and companies. In addition, experts will be selected locally to assist in business negotiations and other matters.

The platform for data on foreign human resources will mainly encompass related ministries, agencies, and the Japan External Trade Organization. Former staff of trading companies and other individuals with specialized knowledge, who are familiar with the overseas locales, will also provide assistance.

Along with some 1,500 companies already designated for extra assistance, 340 more small and medium-sized businesses will be added.

The new policies are slated for implemen­tation during fiscal 2018.

Minister Hiroshige Seko of METI re­marked that, together with the Compre­hensive and Progressive Agreement for Trans-Pacific Partnership—also called the TPP 11 because it comprises the original 12 TPP countries minus the United States—and the Japan–EU Economic Partnership Agreement, “This will be an ideal opportunity for the backbone of Japan’s small and medium-sized companies to expedite their presence abroad.”

The Japanese government has set a target of expanding exports of agri­cultural, forestry and fishery products, and food­stuffs to ¥1 trillion by 2019. The aim is to invigorate regional economies by promoting growth in agriculture. One high-ranking bureaucrat in METI said, “As a part of Abenomics, we envisage the expansion to markets abroad as aiding Japan’s regional economies.”

keizaikai magazine