Seems like the recent fall of the Terra (LUNA) ecosystem has acted as a wake-up call for authorities all over like in Japan, who are now seeking proper actions and regulations.
As per the reports, the parliament of Japan has introduced a full-fledged legislative framework that is formed around stablecoins. Specifically, the bill has mentioned the stablecoins pegged to any fiat currency like the US dollar or Japanese Yen, etc. This move taken by the Japanese parliament is considered a historic one.
The legislation clarifies that the stablecoins are digital money and there should be a link between them and a legal tender such as Japanese Yen, etc so that investors or people, in general, can retrieve their face value. Governments all across the world are making efforts in order to ensure that investors in stablecoin are protected after the Terra network stablecoin UST’s crash last month.
Further, the report also added that the collapse of the UST stablecoin resulted in a multibillion worth of loss from such an asset that was considered to be the safest among all digital assets. According to the available data, overall stablecoins have a combined market valuation of approx $161 billion. In a year or so, there will be the implementation of the legal framework for stablecoins and additionally, the Financial Services Agency of Japan is going to propose regulations projected on stablecoin issuers in the next several months.
In late 2021, the Financial Services Agency prepared a measure along with this The House also adopted the measure in March month of this year. Now the bill has been cleared in the House of Councilors with the majority. Further, the report has also indicated that whenever the government thinks to implement the legal framework, then Mitsubishi UFJ Trust and Banking Corporation aims to issue its own stablecoin program dubbed Progmat Coin.
The subsidiary of the bank noted that the token will be backed by Japanese Yen completely and that it will be placed in a trust account and it will also guarantee to redeem at face value. The project Progmat Coin is based on the contribution and worlds done by MUFG’s ST Research Consortium that was founded in the year 2019, with the goal to develop standards for the security token.
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Source: https://www.thecoinrepublic.com/2022/06/05/what-move-is-japans-parliament-taking-now-regarding-stablecoins-to-safeguards-investors/