By Kantaro Komiya

TOKYO (Reuters), – Japan will amend its foreign currency law in order to protect Russia’s financial sanctions after Moscow invaded Ukraine using cryptocurrency assets. This was the top government officials stated Monday.

Hirokazu Matsuno, the Chief Cabinet Secretary, said that the government plans to submit a new Foreign Exchange and Foreign Trade Act revision to the parliament to improve protections from Russia using digital assets.

Fumio Kishida the Prime Minister also demanded that the law is amended during Monday’s session of parliament. After attending the Group of Seven Summit in Belgium last week, he stressed how important it was to coordinate with Western allies.

According to Reuters, a finance ministry official said that discussions are ongoing about the amendment and could not give more details.

This revision “presumably permits the government [to apply the law] to crypto-asset exchanges like banks and force them to inspect their clients for Russian sanctions targets,” stated Saisuke Sakai of Mizuho Research and Technologies, senior economist.

The Japanese government has placed asset freeze sanctions against more than 100 Russian officials and oligarchs. Japan has banned the export of high-tech products and removed Russia from its most-favoured nations trade status. Russia considers Russia’s actions against Ukraine to be a special military operation.

Japan’s financial regulator demanded that about 30 cryptocurrency exchanges refrain from conducting asset transactions with sanctions targets earlier this month.

To implement these regulations, a legislative review is an important step. Sakai says that Kishida government likely developed the legal reform plan due to the stricter Western regulations and the high Japanese support for sanctions against Russia.