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A plan to merge two separate industry bodies, the Japan Cryptocurrency Business Association and Japan Blockchain Association, had been dropped after talks stalled in favour of the new body to regulate exchanges registered with Japan's Financial Services Association, the sources said.
The sources declined to be identified because they are not authorised to speak to the media.
Officials at the Japan Cryptocurrency Business Association and the Japan Blockchain Association were unavailable for comment.
Hackers last month, stole about $530 million from Tokyo-based cryptocurrency exchange Coincheck Inc, exposing flaws in Japan's system and raised questions over how Japan regulates the industry.