WATARU SUZUKI, Nikkei staff writer
TOKYO — Japan’s crypto exchanges are simplifying the process for approving new cryptocurrency listings, in an aim to boost the number that are traded in the country and catch up with the rest of the world, an industry body said on Tuesday.
The Japan Virtual and Crypto Assets Exchange Association (JVCEA), a group of 31 exchanges, plans to release a “green list” of 18 popular cryptocurrencies in late March, it said in an online presentation. Members previously needed to go through the association’s screening process to list any currency, but those on the green list will no longer be subject to screening.
U.S. exchange Coinbase listed 139 cryptocurrencies for trading at the end of 2021. In comparison, only about 40 are listed on Japanese exchanges in total. The 1.18 trillion yen ($9.8 billion) worth of cryptocurrency held by users at Japanese exchanges as of January was also a fraction of Coinbase’s $278 billion in December.
Some industry executives said sophisticated traders have flocked to exchanges that do not have a license in Japan, such as Binance, partly due to the lack of options.
The green list includes cryptocurrencies that are considered “widely handled in Japan,” such as bitcoin, ethereum, XRP and Litecoin. Conditions for being added to the list include being listed on three or more exchanges, one of which has listed the currency for at least six months.
The Japanese exchange with the largest number of listings currently is GMO Coin, which handles 20 cryptocurrencies, according to a JVCEA official.
“Only a handful of crypto exchanges are profitable because it took such a long time to get cryptocurrencies approved. Users also flocked to overseas exchanges,” said Genki Oda, a vice chair of JVCEA. “The goal is to eliminate the time it takes to list a token and bring the industry closer to global standards.”
JVCEA was set up in 2018 as a self-regulatory body after a series of hacking incidents triggered intense scrutiny from regulators. But the sluggish approval of tokens has been a major roadblock in boosting the popularity of cryptocurrency in Japan.
Each exchange had to go through a lengthy screening process even for widely circulated tokens like bitcoin and ethereum, causing a large backlog of applications. In October, there was a pipeline of more than 80 applications waiting to be approved.
The new measure will free up JVCEA to spend more resources approving new cryptocurrencies as well as initial coin offerings and initial exchange offerings, an official said.