Japanese crypto holders will soon be able to convert their assets into hard cash and withdraw it on the spot after it was announced that crypto ATMs would be returning to the country after a four-year hiatus.
As reported by local news outlet Mainichi Shimbun, once the terminals, created by Osaka-based crypto exchange Gaia, are up and running, users will be able to convert and withdraw bitcoin, ether, bitcoin cash, and litecoin using an app.
Over the next 12 months, Gaia has plans to install 50 of the machines (known locally as ‘BTMs’) in Osaka and the country’s capital Tokyo. This number will rise to 130 over the next three years.
To use the service, users need to register to get their hands on a special card. They then send their crypto to the machine using their phone and withdraw the funds in yen.
It’s hoped the terminals will make the process of withdrawing crypto funds quicker – it currently can take a few days for funds to move from an exchange to a bank account.
According to a Gaia press release, the new machines will operate with a number of anti-fraud measures built in.
These include a withdrawal limit per transaction of 10,000 yen (around $750), topping out at 300,000 yen per day, careful verification screening at the time of user registration, and close monitoring with cameras.
Regulatory chaos is threatening Japan’s crypto future
Even with the proposed security measures, this is a curious time for Japan to be giving the green light to crypto ATMs.
The country is currently undergoing something of a crisis where virtual currencies are concerned, unsure about how exactly they should be regulated.
As reported by the Financial Times, the country’s leading crypto regulator, the Japan Virtual Currency Exchange Association (JVCEA), has seen “a stand-off with regulators, corrosive infighting and a chronic lack of resources.”
These issues threaten not only the organization itself but Japan’s very status as a global crypto hub.
Established in 2018, the JVCEA was intended to take the lead on crypto self-regulation in Japan. However, the country’s financial service agency has since criticized the way the organization does things, specifically highlighting the conduct witnessed in two JVCEA meetings last year.
According to FT, the JFSA became concerned about “delays to crucial anti-money laundering regulation” and the fact that during the meetings, it “was not clear what kind of deliberations the body was having, what the decision-making process was, why the situation was the way it was, and what the responsibility of the board members were.”
The FSA also highlighted a lack of communication between high-level JVCEA members, resulting in overall poor management.
JVCEA members have also criticized the organization, claiming that it’s not equipped to move quickly on issues such as defining new anti-money laundering (AML) measures. There are also concerns that, even if it did put these new rules in place, it would be difficult for exchanges to implement them due to them being “small operators” (via FT).
Finally, there are worries about the professional background of those making the decisions.
According to a source quoted by FT, “office staff mostly consisted of retired people from banks, brokerages and government departments rather than secondees from member companies,” (our emphasis).
This, they said, is why “no one there really understands blockchain and cryptocurrencies. The whole mess shows it is not a simple problem of governance. The FSA is very angry about the whole management.”