Japan’s Financial Services Agency has announced that it will lift the ban on domestic distribution of stablecoins in 2023. The new bill will be implemented as per the revised Payment Services Act. Under the bill, providers will be limited to banks, money lenders and trust companies.
According to reports, the Financial Services Agency (FSA) of Japan has announced that the ban on the domestic distribution of stablecoins issued abroad will be lifted in 2023. Significantly, Japan’s efforts to regulate crypto business started almost five years ago.
However, the legal offering of stable coins is particularly recent. In June, Japan’s parliament passed a bill to restrict the issuance of licenses to banks, agents and trust companies in Japan. This law is intended to protect investors in the financial system from the risks associated with the rapid introduction of stablecoins. Apparently, the cost of Stablecoins is the result of a significant decrease in the value of cryptocurrencies following the collapse of the Terra token.
According to the “Revised Payment Services Act”, which came into force in May 2021, the Cabinet Office decided to implement new rules on the crypto market, in relation to stablecoins. In the guidelines issued in accordance with the Revised Billing Services Act, it is stated that once the bill is deposited, the domestic stablecoin issuer will be required to prepare a contract.
In addition, as stated in the previous bill, providers will be limited to “banks, money transfer service providers and trust companies”. Additionally, when considering Stablecoins issued overseas, distributors in Japan are required to protect their assets. Also, the limit for payment should be 1 million yen per transaction, according to the bill. Although the purpose of overseas statscoins is not known, according to the tweet of journalist Colin Wu, the coins that will be affected will be USDC, USDT, etc:
In addition, the report suggested that the FSA will gather ideas and suggestions for further guidelines for stablecoins. Meanwhile, the company has implemented measures to improve security and transparency, such as recording transaction information.