In recent years, Japan has been recognized as one of the pioneers in embracing the crypto industry. In its latest decision to further streamline the sector, the Japanese Crypto Asset Business Association (JCBA) is making strides in redefining the rules around Initial Coin Offerings (ICOs).

JCBA’s Vision For The ICO Market

The JCBA’s latest endeavor centers around the proposal of an overhauled framework for Initial Exchange Offerings (IEOs) and ICOs. This decision was catalyzed by the association’s proactive engagement with Web3 firms, culminating in a series of discussions to pinpoint the most effective guidelines.

According to the JCBA’s official site, the preliminary recommendations have already been shared with the Japanese Business Association, marking the first step towards potential nationwide acceptance.

The revised blueprint touches upon four aspects that seek to refine the ICO landscape. The initial focal point pertains to the price calculation process, emphasizing the expansion of calculation techniques and the importance of transparency in price-related communications.

Simultaneously, the association also addresses liquidity concerns, proposing specific benchmarks to ensure adequate liquidity is maintained at the listing stage.

Future-Oriented Approach To ICO Regulation

The JCBA’s draft further delves into the stabilization of operations, laying down protocols about price stabilization during the listing and aligning the crypto world more closely with traditional IPO practices. Another significant highlight is the JCBA’s stance on on-sale restrictions.

The proposed guidelines call for a more structured approach to lock-ups, targeting issuers and underwriting entities, to ensure a balanced and stable market environment.

In response to the JCBA’s recommendations, Yoshihiro Yoshida, Chairman of the JCBA ICO/IEO Committee, expressed the association’s commitment to safeguarding consumer interests.

Unlike conventional IPO markets, Yoshida emphasized the significance of adopting tough measures, such as sales restrictions and price stabilization mechanisms. The chairman noted:

Using this proposal as a starting point, we will hold discussions with relevant organizations regarding both customer protection measures, such as institutionalizing sales restrictions, and market efficiency measures, such as price stabilization measures at the time of listing, which are common in the IPO market.

Furthermore, JVCEA Chairman Genki Oda shared his perspective on IEOs, acknowledging their infancy and potential as a usable financing tool for Japanese Web3 investors. Oda stated:

Japan was the first country in the world to institutionalize IEO based on various aspects of laws, regulations, tax systems, and accounting, and while it has the potential to greatly accelerate the development of Japan’s Web3 industry, it is still in its infancy.

Featured image from Unsplash, Chart from TradingView