Japan’s FSA could remove restrictions on domestic distribution of stablecoins created abroad. A report claims that the country could loosen its legislation in 2023. If the ban is lifted, the onus will fall on domestic distributors instead of issuers.
In June, Japan became one of the first significant nations to create a stablecoin legal framework. Six months later, the Financial Services Agency (FSA) is taking yet another key step to modify the current ban as it works to lift the ban on foreign-issued stablecoins.
Which tokens will be made accessible is still a mystery. The USDC and USDT coins from Tether and Circle are anticipated to return, nevertheless. The new stablecoin rule is reportedly expected to be implemented in 2023, according to a report by the regional news source, Nikkei.
Japan’s FSA Easing Stance on Stablecoins
To preserve their value, distributors rather than foreign issuers will be responsible for managing stablecoins under the new regulations. Under the conditions of asset protection through deposits and an upper limit of remittance, the country’s digital asset exchanges will be permitted to conduct stablecoin trade.
The FSA has suggested a restriction of 1 million yen (or $7,500 per transaction) on the amount that can be sent using these stablecoins.
On the other hand, the issuer of locally produced stablecoins will need to get ready assets as security. In addition, the Japanese stablecoin market only allows banks, fund transfer services, and trust businesses to be issuers.
The FSA will mandate stablecoin distributors to record transaction details such as user names as part of anti-money laundering (AML) measures. The financial regulator also plans to start collecting feedback on proposals for its draft guidelines on stablecoins.
New Crypto Regime for 2023
Apart from certain areas, Japanese authorities recently loosened regulations governing the cryptocurrency market. It includes making it more straightforward for crypto exchanges to list digital currencies.
In November, the Digital Agency of Japan announced that it would create its own decentralized autonomous organization (DAO) before legislating its legal status. The Japanese Ministry of Economy has even set up a web3 office dedicated just to web3 policy.
In addition to stablecoin regulations, Japan is giving a push to sustainable cooperation with the country’s crypto miners. Japanese utility Tokyo Electric Power’s (TEPCO) partnership with equipment manufacturer TRIPLE-1 will power cryptocurrency mining with excess electricity on its grid.
