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The Japanese government can seize obtained cryptos


Cryptocurrencies paved way for a new market altogether. In the current market condition, people buy goods and services using traditional crypto exchange. The financial institutions track down certain transactions.


Cryptocurrency grew attention as an investment model in 2009. The currency became an instant hit amongst investors from the beginning itself. The concept of blockchain technology and the decentralized finance model became an instant hit. If you are looking to invest or trade cryptos check out Bitcoin smart.



What is blockchain technology?


The concept of blockchain technology in the field of cryptos is interesting logic. Every crypto runs on a chain of networks. Each user transaction is broken down into single units of blocks. In simple layman’s terms, these blocks are nothing but ledgers that stores transactions.


This public network is accessible to everyone on the network. But, the storing of user detains is an interesting analogy to see. The platform assigns a unique reference number to its blockchain. It is a combination of alphanumeric code that does not have any link to its original user. It does not trace back to its original investor.


What is decentralized finance?


The concept of decentralized finance is nothing but undertaking transactions bypassing regulatory agencies. Bitcoin, Ethereum, or any other popular cryptos allow easy peer-to-peer transactions. It means despite the difference in currency the recipient can receive tokens. The digital wallet plays the role to enable these transactions through the internet.


Impact of crypto investments on the economy


Since the launch of cryptocurrencies, there has been huge outrage on the negative impact. Many experts have been harping time and again on the negative impact of this investment. Since these transactions are not monitored, it is a threat to the economy. It is highly possible to use these funds for money laundering. There have been reports on crypto investments funding terrorism activities.


Until a decade before all monetary transactions were undertaken through banks. The country’s banking system played a pivotal role in enabling this transaction. With cryptos entering the global market, the role of banks is limited to buying and selling. The banking system takes a role when an investor converts holding to traditional currency. The power that was earlier assigned to government and central banking agencies drifts. It is a revolutionary change in the investment market. Also, central banks do not have control over the number of cryptos minted. Only investors who hold to sell their holdings come under the radar of banking agencies.


If investors try to adopt this investment model on a large scale then it has an impact to disrupt the economy. To shift this change, many countries are now formulating policies. Governance policies are being developed to ensure crypto trading falls under monitoring. Many countries including India are working on understanding this investment. Indeed, many countries have already established their connections with crypto exchanges. , these exchanges supply information on investments and investors. It will allow the government to understand the volume of investment in the country. Also, during any economic crisis efforts may be taken to protect investor interest.


The Japanese government set to work on new regulations


Given the decentralized nature of crypto, it becomes impossible to track these transactions. Many countries have come up with anti-money laundering regulations. Regulations and governance frameworks are being formalized to track this payment model.


Japan is the next country to join this list. The new law passed by the Japanese government includes the option to seize cryptos. An investor found procuring or holding seized cryptos is a criminal offense.


At the beginning of this month, the country had also passed a law to ban non-banking firms. Any Japanese firm that does not have a valid banking license can longer distribute stable coins. The primary agenda of this ban is to ensure the protection of investor interest. The ban directly aims to reduce potential risks involved in such investments. The government has also cleared listed names of authorized financial institutions. It ranges from local banking authorities to registered agents in the listing. All these agencies are under the ambit of government authorities.


The proposed law also lists down details of assets that can be seized. It is a wait-and-watch situation to understand how the bill can change cryptos operate. It is yet another milestone towards bringing governance in crypto trading.

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