FSA Official: Asia Should Have Competitive Edge in Blockchain Tech

A representative of Japan’s Financial Services Agency (FSA) has indicated he believes Asia should emerge as a leader in blockchain technology.

The comments came as part of a keynote address at the OECD-ADBI Roundtable on Capital Markets and Financial Reform in Tokyo last week, where vice minister for international affairs Masamichi Kono addressed the subject.

There, Kono noted Asia's historical aptitude in leveraging emerging technologies before discussing blockchain tech.

Kono said:

"An area of strength for Asia may be in making the best use of technological innovations. Particularly for those ‘disruptive technologies’, including distributed ledger and blockchain technologies, Asia has a competitive edge, and should be in a position to be able to deploy those new tools in financing growth in the region in a more cost-effective yet safe manner."

Kono ended his remarks by noting that the FSA believes upholding confidence in its markets to be its top priority, but that it would support technologies that could enhance transparency and accountability as well as enable innovations in accounting and corporate governance.

The statements came as part of a wider discussion on how Asia’s financial system is changing following the 2008-2009 financial crisis, with Kono noting that the market is more broadly shifting away from an "overreliance on a limited number of banks".

Entitled "A New Strategy for Growth Finance in Asia", the speech also touched on topics including the need for new regional strategies for long-term investment and regulatory reform.

Focus on regulation

The statements are the latest that find Japan’s top financial regulator taking more of a leadership role in industry matters following a string of announcements that found it moving to bring bitcoin and digital currencies under existing legislative frameworks.

For example, the FSA recently submitted a proposed change for domestic financial regulations to Japan’s national legislature. The definition would effectively label bitcoin as a form of property, thus bringing exchanges under existing anti-money laundering (AML) and know-your-customer (KYC) rules.

Notably, deliberations on how best to regulate digital currency applications of blockchain technology have been ongoing in Japan for over a year.

Such conversation has been given heightened tension due to the fact that bitcoin’s once-largest exchange Mt Gox was based in Tokyo prior to its 2014 collapse.

A New Strategy for Growth Finance in Asia

Mt Fuji image via Shutterstock