Japan plans to prohibit banks and insurance companies from selling Virtual Money, while securities companies may be permitted.

[Japan plans to ban banks and insurance companies from selling virtual money; securities companies may be permitted] The Financial Services Agency of Japan is advancing a regulatory scheme for financial products that intends to prohibit banks and insurance companies from selling virtual money, while allowing institutions such as securities companies to engage in the sale of virtual money. Previously, the Financial Services Agency of Japan has regarded virtual money as an investment target and has been exploring plans to regulate it under the Financial Instruments and Exchange Act. The agency believes that virtual money prices are highly volatile and there is a risk of asset leakage due to cyber attacks, so it is necessary to protect the interests of depositors and policyholders. However, given that institutions such as internet securities companies have already started selling virtual money, from the perspective of fair competition, the Japanese Financial Services Agency has initially decided to allow securities subsidiaries of banks or insurance companies to sell virtual money. The report also points out that “it is expected that the Financial Services Agency of Japan may only recognize the possession and operation of virtual money by banks or insurance companies after risk management measures are improved.” The Financial Services Agency of Japan plans to submit relevant legal amendments at next year's regular national meeting.