Japan-based crypto exchanges may be able to deal in stablecoins such as USD Coin (USDC) and Tether (USDT) in 2023.
Japan’s Financial Services Agency (FSA) announced a draft system and guidelines for the circulation of stablecoins tied to the value of legal currencies.
In the report, the new guidelines will be applied upon the revised Payments Services Act that will come into force in 2023. This bill allows domestic crypto distributors to handle foreign-issued stablecoins on the condition that sufficient collateral is maintained.
Stablecoins are a form of cryptocurrency where its value is derived, or pegged, to an existing real-world fiat currency such as the US dollar, or commodities such as gold. They’re designed to stabilise prices of volatile cryptocurrencies like Bitcoin, and are also used as stores of value or units of account.
Other reports say that the FSA is also seeking public feedback on a draft regulation that will allow Japan-based crypto exchanges to offer stablecoin trading services – which means that Japanese exchanges may begin trading popular stablecoins such as USD Coin (USDC) and Tether (USDT) if passed.
However, the FSA is allegedly still in doubt on the effectiveness of the recording of transactional information. The government agency also is in the belief that more strict anti-money laundering laws have to be put in place once the stablecoin ban is lifted.
As of writing, there are 31 Japanese crypto exchanges registered with the FSA, and none of them list stablecoins.
Back in June, the Japanese parliament passed a law that declared stablecoins to be defined as digital money.
In this legislation that will come into force in 2023, stablecoins must be linked to the Japanese yen, or another form of legal tender – while also guaranteeing the holder the right to redeem their stablecoins at face value.
The same bill states that only licensed banks, trust companies, and registered money transfer agents can issue stablecoins.
