The Financial Services Agency supports AMM demonstration experiments | 9 companies including cryptocurrency exchanges and financial institutions have applied to participate.

## Verification of KYC and AML compliant cryptoassets services

On June 6, the Financial Services Agency announced that it has decided to support a demonstration experiment utilizing AMM functions by nine financial institutions as the 10th case of the "FinTech Demonstration Experiment Hub."

This experiment has been adopted after a rigorous review and will serve as a verification of a new service model that incorporates identity verification (KYC) and anti-money laundering measures (AML/CFT) in the cryptoassets field.

What is AMM?

In Japanese, "automated market maker". A mechanism that determines prices through liquidity pool operations using smart contracts.

▶️ Cryptoasset Glossary

Overview of the Demonstration Experiment

This project will be the 10th support case in the FinTech Proof of Concept Hub. Various proof of concept experiments have been conducted so far, including blockchain authentication, facial recognition, AI utilization, change investment, and information bank services (see "Regarding the Establishment of the FinTech Proof of Concept Hub").

This demonstration experiment verifies the provision of services using AMM functionality to customers holding wallets associated with addresses that have shown that KYC has been conducted by financial institutions using tokens that simulate cryptoassets, as well as measures to reduce risks related to money laundering and terrorist financing.

The experimental period will be from June to September of the 7th year of the Reiwa era. After the completion of the demonstration experiment, the results of the experiment, which will include compliance and supervisory issues organized through the experiment, as well as practical issues related to legal interpretation, are scheduled to be published on the Financial Services Agency's website.

Applicant

The following 9 companies have been announced as applicants.

  • SBI VC Trade Co., Ltd.
  • Sony Bank, Inc.
  • Daiwa Securities Group Inc.
  • Nomura Holdings, Inc.
  • Bitbank, Inc.
  • Mizuho Trust & Banking Co., Ltd.
  • Sumitomo Mitsui Trust Bank, Limited
  • Mitsubishi UFJ Trust and Banking Corporation
  • KPMG Japan

about the FinTech Proof of Concept Hub

The FinTech Demonstration Experiment Hub is a system established by the Financial Services Agency on September 21, 2019. The aim is to dispel the hesitations and concerns that fintech companies and financial institutions tend to have when trying to conduct unprecedented demonstration experiments, and to promote innovation.

For the points we want to organize through the experiments, we will form dedicated teams within the agency for each individual experiment to provide continuous support. After the completion of the demonstration experiment, the results, including compliance and supervisory issues, practical issues related to legal interpretation, etc., will be published on the Financial Services Agency's website.

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The content is for reference only, not a solicitation or offer. No investment, tax, or legal advice provided. See Disclaimer for more risks disclosure.
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