As Japan Set To Lift Its Stablecoin Ban, Crypto Enthusiasts Can Expect It In 2023

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The Financial Services Agency is expected to lift its ban on foreign-issued stablecoins in 2023. These stablecoins will be managed by local distributors who will need to ensure consumer protection and comply with AML laws.

Japan’s top financial regulator has indicated that 2023 could see some positive changes when it comes to major stablecoins. These include Tether USD (USDT), USD Coin (USDC) etc.

According to Japanese local media, the Financial Services Agency is set to lift its controversial ban on the domestic distribution of foreign-issued stablecoins in 2023.

Revised Payment Services Act

According to a report by Coinpost, the Financial Services Agency made the decision after reviewing Cabinet Office orders. In addition, the agency further plans to establish appropriate guidelines in line with the latest revised Payment Services Act. The FSA also conducted a review of stablecoins and their potential impact on the Japanese financial system.

The financial regulator said that in the interests of consumer protection, stablecoins issued overseas will be overseen by local distributors rather than their overseas issuers. In addition, these distributors will protect the value of stablecoins. Sufficient reserves would be maintained and a limit of 1 million yen per transaction would be imposed on remittances facilitated by these stablecoins.

As an anti-money laundering measure, stablecoin distributors will be required to disclose certain information to the FSA. Also, these would include names related to transactions.

Locally issued stablecoins

For stablecoins issued in Japan, issuers will be required to prepare collateral assets. Issuers are limited to banks, remittance service providers and trust companies.

The FSA’s decision to lift the ban on foreign-issued stablecoins could be seen as an important development for the cryptocurrency industry in Japan. This will allow domestic investors to access a wider range of stablecoins, including popular coins such as Tether and USDC.

This should increase competition in the stablecoin market, which could lead to lower fees for consumers. Additionally, Japan passed landmark stablecoin legislation in June 2022, providing a regulatory framework for the use of these digital assets in the country.

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