Japan has taken a key step to cement its position as a leader for cryptocurrencies

NEW YORK — China is moving forward with a plan to crackdown on cryptocurrencies, but Japan is singing a different tune.

Japan's Financial Services agency on Friday granted 11 cryptocurrency exchanges licenses to legally operate in the country, according to reporting by The Wall Street Journal's Paul Vigna. The news comes amid a crackdown on digital currencies by Japan's neighbors.

China banned initial coin offerings, a red-hot cryptocurrency-based fundraising method, earlier in September and since then there have been numerous reports of a wide-ranging crackdown on exchanges. On Friday, South Korea joined China in banning ICOs.

Licensed exchanges, according to Vigna, will be required to conform to a number of rules to maintain their status.

"The rules require exchanges to maintain minimum capital reserve requirements, segregate customer accounts, and employ anti-money-laundering and know-your-customer practices," Vigna wrote.

Up until this point Japanese regulators have allowed cryptocurrency exchanges to operate without a licenses. In April, Japan deemed bitcoin, the largest cryptocurrency by market cap, as a legal form of payment.

The move by Japan could help cement the country's position as a leading market for cryptocurrencies. At the beginning of the year, bitcoin exchange trading volume between the Japanese yen and bitcoin surpassed volume between the digital coin and China's yuan, according to data from CoinDesk.

And since China banned ICOs on September 4, Japan has emerged as the largest market for bitcoin trading.