Japan’s Financial Services Agency is expected to remove the restriction on the domestic distribution of stablecoins created abroad in 2023.
According to Coinpost, new crypto rules in accordance with the most recent ‘Revised Payment Services Act’ will apply soon.
Proposed Rules for Stablecoins
If the ban is lifted on foreign-issued stablecoins, the party responsible for stablecoins in Japan would automatically be the distributor. Per the report, distributors will handle the tokens instead of the foreign issuers to protect their value.
Meanwhile, the maximum amount of remittances for such stablecoins is proposed to be capped at 1 million yen or $7,500 per transaction. However, it is unclear which stablecoins will be returning to Japan. The U.S.-based Circle-issued USDC could be one of the stablecoins to make an entry into Japan. Tether (USDT), the largest stablecoin, could be another player.
On the contrary, the onus again falls on the issuer for domestically-minted stablecoins. The issuer will require collateral assets as security in this case. Meanwhile, banks, trust corporations, and companies offering fund transfers will be the only allowed issuers in the stablecoin market.
BeInCrypto reported earlier that the Japanese financial watchdog intends to classify algorithmic stablecoins in the same category as Bitcoin. But, the Financial Services Agency has hinted that future rules on the category may be more stringent.
BeInCrypto couldn’t independently verify the report.
New Year, New Crypto Regime
Apart from certain areas, Japanese authorities recently loosened regulations governing the cryptocurrency market. It includes making it more straightforward for crypto exchanges to list digital currencies.
In November, the Digital Agency of Japan announced that it would create its own decentralized autonomous organization (DAO) before legislating its legal status. The Japanese Ministry of Economy has even set up a web3 office dedicated just to web3 policy.
Meanwhile, Binance has devised a plan to return to the Japanese market. This after a year of exiting the market after warnings by the domestic regulators. In a fresh attempt at re-entry, the largest exchange by volume could acquire the Japanese crypto business Sakura Exchange BitCoin. Meanwhile, Square Enix and the crypto-heavyweight SBI disclosed 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 giving a push to sustainable cooperation with the country’s crypto miners. Japanese utility Tokyo Electric Power’s (TEPCO) partnership with equipment manufacturer TRIPLE-1 will power cryptocurrency mining with excess electricity on its grid.
Contrarily, in terms of restrictions, a change to Japan’s Labor Standards Act also forbids the use of virtual currencies in digital salary transfers.
Disclaimer
BeInCrypto has reached out to company or individual involved in the story to get an official statement about the recent developments, but it has yet to hear back.
Source: https://beincrypto.com/japan-expected-lift-stablecoin-ban-foreign-issued-currency-2023/