Japan’s Spy Bill Raises Concerns

A controversial set of “active cyber defense” (ACD) bills has sparked heated debate in the Japanese parliament.

If passed, these bills would legalise peacetime surveillance of private communications, including within financial sectors, raising concerns about further restrictions on cryptocurrency usage.

The legislation is being considered amidst a growing list of challenges for Japan, such as overtourism, inflation, a weakening yen, and even rice shortages.

If enacted, the ACD bill would empower the government to collaborate with private telecom and finance companies, allowing state agents to preemptively access and disable servers suspected of being linked to cyber-attacks.

This move could significantly alter Japan’s approach to privacy, security, and digital freedoms.

Will Crypto Be Affected?

Japan’s proposed ACD bill has ignited fierce debate, with critics warning of heightened government surveillance and potential overreach into financial and digital sectors.

At a House of Representatives cabinet committee meeting, Digital Transformation Minister Masaaki Taira assured lawmakers that the legislation would not violate Article 21 of Japan’s constitution, which protects the secrecy of communications.

He argued that the ACD law would enable faster and more effective responses to cyber threats.

However, scepticism remains.

Pushed by Prime Minister Shigeru Ishiba, the bill seeks to align Japan’s cyber policies with US and European models.

It grants the government authority to monitor private telecom and financial firms across 15 key industries.

This expansion of state oversight could particularly impact cryptocurrency exchanges, already under regulatory pressure from the Financial Services Agency (FSA) to register as custodians or partner with major exchanges.

If enacted, the ACD law would likely increase transaction monitoring under anti-money laundering (AML) and counter-terrorism financing (CFT) measures, further tightening restrictions on crypto trading.