Japan’s Financial Services Agency is expected to lift the ban on domestic distribution of stable coins created abroad in 2023.
According to Coinpost, new crypto regulations will come into force soon as per the latest ‘Amended Payment Services Act’.
Proposed rules for stablecoins
If the ban on foreign-issued stablecoins is lifted, the party responsible for the stablecoin in Japan will automatically be the distributor. According to the report, the distributor will handle the tokens instead of foreign issuers in order to protect their value.
Meanwhile, it is proposed to cap the maximum amount of remittances for such stable coins at 1 million yen, or $7,500 per transaction. However, it is unclear which stable coins will return to Japan. US-based Circle-issued USDC could be one of the stablecoins to enter Japan. Tether (USDT), the largest stablecoin, could be another player.
In contrast, for domestically minted stablecoins the issuer reissues. The issuer would require collateral assets as security in this case. Meanwhile, banks, trust corporations, and companies offering fund transfers will be the only permitted issuers in the stablecoin market.
BeInCrypto previously reported that the Japanese financial watchdog intends to classify algorithmic stablecoins in the same category as bitcoin. But, the Financial Services Agency has indicated that future rules on the category may be more stringent.
BeInCrypto could not independently verify the report.
New Year, New Crypto Regime
Apart from a few regions, the Japanese authorities have recently loosened the regulations governing the cryptocurrency market. This includes making it much easier for crypto exchanges to list digital currencies.
In November, Japan’s Digital Agency announced that it would create its own Decentralized Autonomous Organization (DAO) before legislating its legal status. The Japanese Ministry of Economy has also established a Web3 Office dedicated to Web3 policy.
Meanwhile, Binance has drawn up plans to return to the Japanese market. This comes a year after it exited the market following a warning by domestic regulators. In a fresh attempt at re-entry, Japanese crypto business Sakura Exchange, the largest exchange by volume, may acquire Bitcoin. Meanwhile, Square Enix and crypto-heavyweight SBI revealed another deal. The Tokyo Stock Exchange-listed gaming company and SBI entered into an M&A agreement in crypto gaming.
In addition to stablecoin regulations, Japan is promoting sustainable cooperation with the country’s crypto miners. Japanese utility Tokyo Electric Power (TEPCO) partnering with equipment manufacturer TRIPLE-1 will power cryptocurrency mining with excess electricity on its grid.
Conversely, in terms of restrictions, changes to Japan’s Labor Standards Act also prohibit the use of virtual currencies in digital salary transfers.
BeInCrypto has reached out to the company or the person involved in the story for an official statement regarding the recent development, but has yet to hear back.