Japan is expected to remove its prohibition on stablecoins in 2023
Japan’s top financial regulator said that big stablecoins might see some beneficial adjustments in 2023. Among them are Tether USD (USDT), USD Coin (USDC), and others.
The Financial Services Agency is expected to withdraw its contentious prohibition on the domestic circulation of stablecoins produced abroad in 2023, according to Japanese local media.
The Financial Services Agency made the decision after modifying Cabinet Office regulations, according to a report by Coinpost. In addition, the agency intends to create rules consistent with the newest version of the Revised Payment Services Act. In addition, the FSA evaluated stablecoins and their possible influence on the Japanese financial system.
In the interest of consumer protection, the financial authority indicated that stablecoins created abroad would be monitored by local distributors rather than their international issuers. Additionally, these distributors will safeguard the value of the stablecoin. For remittances supported by these stablecoins, sufficient reserves would be maintained and a transaction limit of one million Yen would be imposed.
Stablecoin distributors will be compelled to reveal some information to the FSA as a safeguard against money laundering. In addition, they would include the names associated with the transactions.
With respect to stablecoins issued in Japan, issuers will be obliged to provide collateral assets. Issuers are restricted to banks, providers of financial transfer services, and trust firms.
The decision by the FSA to relax the restriction on foreign-issued stablecoins is a major milestone for the Japanese cryptocurrency sector. It will provide local investors access to a broader selection of stablecoins, including popular ones like Tether and USDC.
This is anticipated to improve competition in the stablecoin industry, resulting in possibly cheaper consumer costs. In addition, Japan approved a groundbreaking stablecoins law in June 2022, establishing a legislative framework for the usage of these digital assets in the nation.