According to Japan’s top financial regulator, major stablecoins may see some positive changes in 2023. Tether USD (USDT), USD Coin (USDC), and others are examples.
According to Japanese local media, the Financial Services Agency plans to lift its contentious ban on domestic distribution of stablecoins issued outside of Japan in 2023.
According to Coinpost, the decision was made by the Financial Services Agency after reviewing Cabinet Office ordinances. Furthermore, the agency intends to establish appropriate guidelines in accordance with the most recent Revised Payment Services Act. The FSA also investigated stablecoins and their potential impact on the Japanese financial system.
According to the financial regulator, stablecoins issued overseas will be supervised by local distributors rather than their foreign issuers in the interest of consumer protection. Furthermore, these distributors will safeguard the stablecoin’s value. Sufficient reserves would be maintained, and a transaction limit of 1 million Yen would be imposed for remittances facilitated by these stablecoins.
Stablecoin distributors will be required to disclose certain information to the FSA as an anti-money laundering measure. These would also include the names associated with the transactions.
In the case of stablecoins issued in Japan, the issuers will be required to prepare collateral assets. Banks, fund transfer service providers, and trust companies are the only issuers.
The FSA’s decision to lift the ban on foreign-issued stablecoins could be viewed as a significant step forward for Japan’s cryptocurrency industry. Domestic investors will be able to access a broader range of stablecoins, including popular ones like Tether and USDC.
This is expected to boost competition in the stablecoin market, potentially resulting in lower fees for consumers. Furthermore, in June 2022, Japan passed landmark legislation on stablecoins, establishing a regulatory framework for the use of these digital assets in the country.
