Circle Considers Issuing A Stablecoin In Japan Under Strict New Regulations

Key Points:

• The stablecoin issuer said it is considering developing a stablecoin in Japan under the new regulations.
• Japan was one of the first countries to have a law governing stablecoins, and it went into effect on June 1.
• Stablecoins must be pegged to yen or other legal tender and guarantee the holder the right to redeem them at face value.

Circle is planning to expand its business by considering issuing a stablecoin in Japan once the country’s regulatory framework comes into effect on June 1.

According to CoinDesk, Circle co-founder and CEO Jeremy Allaire said that in light of the fact that the stable money management law took effect on June 1, Circle is considering issuing a stablecoin in Japan.

If the plan is successful, Japan could become an extremely large market if it is applied to cross-border trade, foreign currency trading and global trade.

Circle CEO Jeremy Allaire expressed interest in the Japan partnership he visited last month.

In a historic move, Japan’s parliament passed the regulatory framework around stablecoins in early June, providing a safety net for investors. This makes Japan one of the first major economies to pass legislation specifically for stablecoins.

Reportedly, Japan’s revised “Payment Services Law” will certify fiat currency-backed stablecoins as “electronic payment methods” and authorize their issuance.

The bill provides clarity around the definition of stablecoins, which will now be considered digital currencies and must be linked to a yen or other legal tender, ensuring holders have the right to redeem them at face value.

Stablecoins can currently only be issued by licensed banks, registered remittance agents, and trust companies. The bill does not address existing asset- or algorithm-backed stablecoins. However, exchanges in Japan do not list stablecoins.

Japan has moved to relax some of its crypto rules, such as token listing and taxation, but overall the country is considered to have strict regulations.

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