We are happy to introduce a Compliance Expert for fin-tech and blockchain companies Tomomi Yamashita who kindly provided her valuable insights on the recent developments in Japan’s crypto and blockchain market.
Tomomi has worked for several global Asset Management companies as a compliance officer for over 15 years, including Citigroup, Merrill Lynch, and Nikko. After that she worked for a few fin-tech companies as a risk/compliance manager, including one of the first crypto exchanges in Japan and a global payment service company.
Tomomi understands the importance of compliance, including AML/KYC, for fin-tech companies and also understands difficulties to find good talent. While blockchain is getting a lot of attention and traction, she believes that there is a need to improve existing system and to solve outstanding issues by using AI identity solutions and hybrid exchange systems.
Q: Japan recently updated the compliance requirements for crypto companies, specifically AML/KYC requirements. Is it a sign of crypto being aligned with traditional financial institutions?
A: No matter the regulatory requirement is getting harder or not, if crypto wants to go main stream then it should be aligned with traditional financial institutions. I understand that was the main concept of Zeus Exchange. Just like other alternative assets, crypto should be treated equally.
Japanese Financial Services Agency (JFSA) is considering to change the legal basis for how it regulates cryptocurrency exchanges. The FSA reportedly is considering to regulate crypto exchanges by the Financial Instruments and Exchange Act (FIEA), instead of its current legal foundation, the Payment Services Act. This means that the exchanges will have stronger customer protections and FIEA obliges securities companies to manage customer funds and securities, such as stocks, separately for corporate assets.
Q: Do you think that Asia is becoming the main hub that will lead the crypto market forward?
A: Crypto as investment, I think it depends on the country and regulation in Asia. In Japan, there is a growing uncertainty.
Speaking of Crypto as one of payment method, I believe some countries in Asia may adopt more quickly than others. However, speaking of Japan, it may take longer.
Q: What are the main obstacles for entrepreneurs entering the Japan market with blockchain/crypto projects?
A: It is hard to find bilingual talent in general and also the need to find people who understand the financial industry. Related to your first question, if crypto exchanges are also treated as traditional financial institutions, you need to recruit talents from financial companies and may be difficult to attract them due to language barriers. Localization is not so easy for any company entering into Japan, not only for blockchain/crypto projects. I strongly believe that the hybrid exchange will become main stream in the future.
lllustrations by Marina Demchenko (Mamihlapinatana Studio)