According to a local financial authority, Japan’s new legislation permitting investors to trade using stablecoins like Tether (USDT) is set to be approved no later than June 2023.
At present, the distribution of stablecoins within Japan is prohibited. However, the Financial Services Agency (FSA) of Japan is working to lift this restriction and aims to authorize certain stablecoins later this year.
An FSA representative stated that only stablecoins that pass specific inspections and prove to be secure from a user safety perspective would be approved. These inspections will include ensuring that international issuers are subject to restrictions similar to those in Japan, with the underlying assets being duly preserved.
The authorities emphasized that there is no way to tell if well-known stablecoins like Tether will be authorized.
The representative stated:
“FSA does not provide any opportunity to access such information before the decision is made.”
The proposed cabinet orders and cabinet office ordinances on the revision to the Payment Services Act of 2022 include new stablecoin laws for Japan. These new regulations, introduced in December 2022, aim to establish specifications for electronic payment instruments and create necessary registration processes.
The FSA will be accepting public feedback on the modifications to the Payment Services Act until January 31, 2023.
In June 2022, the Japanese parliament approved a bill banning foreign stablecoins. As a result, companies that issue stablecoins must only link their digital currencies to the Japanese yen or another form of legal money.
Japanese financial regulators earlier this month called on global regulators to regulate cryptocurrencies in the same way that they regulate banking, arguing for a strong and uniform regulatory framework within the sector.
Some notable cryptocurrency exchanges, such as Coinbase and Kraken, recently stopped operating in Japan due to the country’s struggling cryptocurrency sector.
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