Japan and Singapore regulators collaborate on cryptocurrency project

Japan’s FSA is the first overseas regulator to join Singapore’s DeFi pilot project

In a joint effort to address emerging risks in the decentralized financial ecosystem, Japan's Financial Services Authority (FSA) and the Monetary Authority of Singapore (MAS) have announced a partnership for the regulation and pilot testing of cryptocurrency projects.

The collaboration is part of MAS' “Project Guardian” initiative, which aims to explore the feasibility of digital technology applications while ensuring financial stability and integrity.

Under the cooperation framework, the FSA will participate as an observer in Project Guardian, leveraging its expertise to contribute to the project's objectives.

The initiative will focus on conducting pilot experiments in various sectors, including fixed income, foreign exchange, and asset and wealth management, with a particular emphasis on asset tokenization.

Leong Sing Chiong, deputy managing director of MAS, highlighted the importance of public-private collaboration in fostering a responsible and innovative digital asset ecosystem. He welcomed the opportunity for increased cooperation with the FSA to support global efforts in this area.

Mamoru Yanase, deputy director-general of the strategy development and management bureau at the FSA, also expressed delight at joining Project Guardian.

Recognizing the growing complexity of the decentralized financial ecosystem, Yanase emphasized the need to address emerging risks.

He acknowledged the potential of blockchain technology, including web3, as a powerful driver of innovation and expressed eagerness to collaborate with MAS, traditional financial institutions, and fintech firms to enhance knowledge in this rapidly evolving field.

MAS announced that the FSA is the first overseas regulator to join Project Guardian, paving the way for collaboration on digital asset innovation and best practices for asset tokenization while safeguarding against risks to financial stability and integrity.

This partnership builds upon the existing joint fintech cooperation framework established by the FSA and MAS in 2017 to promote innovation in their respective markets.

The collaboration between Japanese and Singaporean regulators aligns with the recent relaxation of crypto laws in Japan.

The National Tax Agency ruled to exempt token issuers from a 30% tax on unrealized capital gains, and Japanese prime minister Fumio Kishida has expressed interest in exploring the usage of decentralized autonomous organizations and nonfungible tokens to support the government's “Cool Japan” strategy.

Singapore has been taking strides in establishing itself as a world crypto hub. Recently, major crypto companies such as Ripple, Crypto.com and Coinbase have been entering the Singaporean market and expanding their operations there.

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Written by Silvia Pavlof

Silvia has explored various forms of writing, ranging from content creation for social media to crafting movie scripts. Drawing on her experience as a journalist specializing in the gambling sector, she is currently investigating the impact of cryptocurrencies and blockchain on traditional gambling and iGaming.