Japan Will Allow Certain Stablecoins in 2023
There is no indication yet to whether stablecoins backed by US dollars will be allowed in Japan by June 2023, the FSA said.
New rules in Japan allowing investors to trade stablecoins such as Tether (USDT) are expected to be adopted no later than June 2023, according to a local financial authority.
Which products will be allowed?
Japan’s Financial Services Agency (FSA) is working on lifting the ban on the domestic distribution of stablecoins, with plans to allow some stablecoins later this year.
“This does not mean that all foreign products of so-called ‘stablecoins’ will be allowed without any restrictions“, a Japanese FSA spokesman said.
The FSA will only authorize those that have successfully passed individual checks ensuring that these cryptocurrencies are safe from a consumer protection perspective, according to the representative.
Examples include foreign issuers in their home countries that are subject to equivalent regulations in Japan, with the underlying assets stored appropriately.
The authority also stressed that there is no way of knowing whether large stablecoins such as Tether or USD Coin will be allowed.
“The FSA does not provide any opportunity to access such information before making a decision“, the representative explained.
The new rules for stablecoins in Japan are part of proposed Cabinet Office orders and regulations to amend the Payment Services Act from 2022. Introduced in December 2022, the new rules aim to establish requirements for electronic payment instruments and develop relevant registration procedures.
The FSA will accept public comments on changes to the Payment Services Act until 31 January 2023, according to officials.
The new legislation, which is expected to take effect in 2023, has apparently affected many crypto firms, as none of the 31 Japanese exchanges registered with the FSA have offered stablecoin operations since then.
Some major crypto exchanges, including Coinbase and Kraken, have recently suspended operations in Japan, citing the weak crypto market.