- Japan’s Financial Services Agency announced that the agency would lift the ban on the domestic distribution of stablecoins in 2023.
- The new bill would be implemented according to the Revised Payment Sevices Act.
- According to the bill, the issuers would be restricted to banks, fund transfer service providers, and trust companies.
Reportedly, the Financial Services Agency (FSA) of Japan announced that the ban on the domestic distribution of Stablecoins issued overseas would be effectively lifted in 2023.
Significantly, Japan’s efforts in regulating crypto trade could be traced back almost five years back. However, the regulations on the supply of stablecoins in particular had their origin recently.
In June, Japan’s parliament issued a bill to limit the supply of Stablecoins to licensed banks, registered agents, and trust companies in Japan. Mainly, the regulation is aimed at protecting investors and the financial system from risks related to the rapid adoption of Stablecoins.
Notably, the Stablecoins bill was an aftermath of the significant decline in the value of cryptocurrencies following the Terra token collapse.
According to the “Revised Payment Services Act,” which has taken effect in May 2021, the Cabinet Office Ordinances have decided to implement the new regulations on the crypto market, in relation to the stablecoins.
Among the guidelines provided as per the Revised Payment Services Act, it has been given that once the bill is implemented, the issuer of domestic stablecoins would be required to prepare collateral assets. In addition, as mentioned in the earlier bill, the issuers would be restricted to “banks, fund transfer service providers, and trust companies”.
Moreover, while considering the Stablecoins issued overseas, the distributors in Japan are required to protect their assets. Also, the upper limit of remittance is supposed to be 1 million yen per transaction, as per the bill.
Though the specific target of the overseas Stablecoins is unknown, according to the tweet of the reporter Colin Wu, the concerned Stablecoins would be USDC, USDT, etc:
Further, the report suggested that the FSA would collect opinions and suggestions for more guidelines for Stablecoins. So far, the agency has included strategies for promoting security and transparency like recording transaction information.
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