A ban on foreign-issued stablecoins may at last be lifted by the Financial Services Agency (FSA) in 2023.
Newly revised stablecoin act aims to regulate all virtual currencies and limit their issuance to banks and fund transfer companies.
Japan’s FSA plans to allow domestic entities to handle stablecoin transactions based on existing guidelines for asset management and anti-money laundering.
There will be a $7,500 limit on remittances per transaction from the FSA. Local entities seeking to manage and distribute stablecoins must submit information about their users to the regulator’s feedback assessments after December 26.
According to coinpost, in 2023, the Japanese Financial Services Agency may lift the ban on the circulation of stablecoins issued overseas (such as USDC USDT, etc.) in Japan, and the remittance limit will be set at 1 million yen ($7,500) per transaction. https://t.co/lCGCKd3bFT
— Wu Blockchain (@WuBlockchain) December 26, 2022
In a statement, the FSA said that allowing stablecoins in Japan come 2023 will require a lot of regulations, and the proposed feedback exercise will provide it with guidance and insight.
Cryptocurrencies and stablecoins in Japan
The FSA issued guidelines for the issuance and management of stablecoins in 2019. Japan established a framework for regulating stablecoins. To operate in Japan, stablecoin issuers must meet the requirements outlined in the policies, which define stablecoins as crypto assets pegged to fiat currency.
In addition to these guidelines, the FSA granted regulatory approval to several stablecoin projects, including the issue of a USD-pegged stablecoin by Circle Internet Financial, and a yen-pegged stablecoin by Mizuho Financial Group, J-Coin.
Japan passed a law for crypto investors’ protection in June 2022 following the collapse of Terra (LUNA). Stablecoins’ legal status was clarified by the law along with their mandatory link to yen and face value management. Also, the FSA urged users not to use algorithmic stablecoins.
There were only 31 Japanese exchanges handling stablecoin trades as of Nov. 30.
