By Michael Scott
The Japan financial services agency (FSA) is expected to launch crypto-friendly regulations on using foreign-issued stablecoins next year. This decision is influenced by changes in global practices necessitating the Japanese government to reconsider lifting the ban on the domestic circulation of stablecoins.
New Stable Coins Regulation in Japan; What Has Changed?
The December 26 update captured by the local news agency Nikkei confirms that the Financial Services Agency (FSA) has plans to lift the ban on the distribution of foreign stablecoins in Japan. The announcement comes when Japan desperately needs a crypto exchange platform that offers the buying and selling of stablecoins pegged to a foreign country. Such stable coins comprise Tether (USDT) or USD coins tied to US currency.
Notably, FSA argued that restraining the stablecoin regulation will support the registered local exchanges to facilitate stable coin trading. Engaging the local exchange aims to protect stable coin value and reduce overreliance on foreign issuers. Japan regulators anticipate that the increased payment using stable coins will push the remittance level to $7,500 per transaction fueling international remittance to be cheaper and faster.
Despite the proposed stablecoin regulation, the Japanese financial watchdog has different perspectives on lifting the ban on the circulation of stablecoins in Japan’s crypto market. Financial experts desire stringent regulation linked to anti-money laundering measures to prevent contagion risk in the financial sector. Currently, the Japanese authority is working closely with financial advisors to gather valuable input on lifting the stablecoin ban in the country.
What Plans Does Japan Have for Crypto Currency?
Terra collapse influenced the Japanese government to develop harsh regulations to control crypto activities in the country. Besides the mid-year stablecoin issuance ban Japanese have demonstrated their interest in the crypto space. As a result, the Japan Ministry of Economy has established a Web3 office for policymakers.
Correspondingly, a local organization based in Japan developed a decentralized autonomous organization (DAO) to uphold Web3 activities in Japan. A few weeks ago, Binance, the leading crypto exchange platform, announced its plans to acquire Sakura Exchange BitCoin targeting to return to the Japanese crypto space.
Despite Binance acquisition plans, SBI and Square Enix mergers and acquisition negotiations are at their pinnacle stage, eyeing the Japanese crypto gaming world.
Elsewhere, the government of Japan and Tokyo electric power (TEPCO) is bargaining for fair power deals to improve crypto mining activities in the country.