Following Russia’s invasion of Ukraine, Japan will modify its foreign exchange rules to prevent Russia from dodging Western financial sanctions by using crypto assets.
According to the Chief Cabinet Secretary Hirokazu Matsuno, the government will propose a revision of the Foreign Exchange and Foreign Trade Act in the current parliament session.
As per the Reuters report, this is to reinforce protections against potential sanctions-busting by Russia through digital assets.
Prime Minister Fumio Kishida urged for the law to be reformed in the Monday parliament session, stressing the importance of synchronized moves with Western allies.
Saisuke Sakai, senior economist at Mizuho Research and Technologies, stated the amended law “presumably enables the government to apply the law to crypto-asset exchanges like banks and oblige them to scrutinize whether their clients are Russian sanction targets.”
Following Russia’s invasion of Ukraine, the Japanese government imposed asset freezes on over 100 Russian officials, oligarchs, banks, and other institutions.
Japan has also imposed a restriction on high-tech exports and revoked Russia’s most-favored-nation trade status, citing Russia’s actions in Ukraine as a special military operation.
Just a few days back, reports flew in saying that Russia is considering accepting Bitcoin as a payment method for its oil and gas exports. This is in response to all the harsh sanctions coming from Western countries due to its invasion of Ukraine.