Japan is working on a new bill. Stablecoins may face bans.
Cryptocurrency markets are subject to new regulations in many countries. Japan has taken action for stablecoins. Fixed-value cryptocurrencies indexed to fiat currencies (stablecoins) are also the main agenda item of the regulators in America, and many countries are expected to take more concrete steps in this regard in the near future.
Japan Crypto Regulation
Japan’s top financial regulator, the Financial Services Agency (FSA), is working on a legislative proposal that would only allow banks and wire transfer companies to issue stablecoins, as a blow to leading issuers like Tether, Nikkei reported.
Fiat-backed cryptocurrencies will need to be backed by reserve assets. The government agency is also focused on strengthening anti-money laundering regulations in the country.
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Last December, a subsidiary of Tokyo-based IT giant GMO launched the first regulated stablecoin pegged to the Japanese yen value. Last month, the Treasury Department urged Congress to oversee dollar-backed cryptocurrencies like banks to provide “adequate” protection.
The stablecoin title is receiving serious attention in ongoing crypto regulations around the world. Stablecoins, which are seen as an escape route, especially in issues such as money laundering and tax evasion, are seriously scrutinized by regulatory agencies. Stablecoins are being evaluated under many sub-topics, such as establishing supervisory mechanisms, transparency of issuers, and strengthening of collateral.
There was no ban signal for stablecoins on the US side, but it is acknowledged that current regulations do not make stablecoins safe. The fact that they are not exposed to as strict conditions as banks and that they meet certain conditions remains on the agenda at the moment.
Tether, USDC and other stablecoins represent a tens of billions dollar economy. Countries draw attention to the fact that their risks increase with the growth of the ecosystem. Japan aims to protect its citizens by taking much more strict steps in such matters. Turkey and the USA are still working on regulations. The transformation of existing studies into comprehensive regulations can enable these regulations to spread rapidly all over the world.