Japan’s FSA to Rescind Ban on Stablecoins Like USDT, USDC
- Japan’s Financial Services Agency (FSA) is planning to lift the ban on the domestic distribution of foreign stablecoins in 2023.
- In June 2022, Japan’s parliament passed a bill to restrict non-banking institutions from issuing or distributing stablecoin in the nation.
- The tax committee adopted a proposal that would exempt crypto firms from having to pay taxes on tokens issued for paper gains on Dec 15.
- the FSA said that it would follow the United States for stricter laws on stablecoins.
2022 has been one of the worst years for crypto and many have witnessed their net worth crash significantly recently. Meanwhile, regulators have also maintained a strict stance on crypto coins. Investors in Japan were banned from using stablecoins but now, they can reportedly face major changes in the cryptocurrency-related restrictions related to the use of tokens like Tether (USDT) and USD Coin (USDC).
According to a report by local news agency Nikkei, Japan’s Financial Services Agency (FSA) is planning to lift the ban on the domestic distribution of foreign stablecoins in the upcoming year.
Notably, in June 2022, Japan’s parliament passed a bill to restrict non-banking institutions from issuing or distributing stablecoin in the nation. As of November 30, 2022, none of the 31 Japanese exchanges registered with the FSA, including companies like BitFlyer and Coincheck, were handling stablecoin trading, according to official data.
The report, which was published on December 26, claims that the new stablecoin laws by FSA will allow domestic exchange platforms to conduct stablecoin transactions as long as assets are preserved by deposits and there is an upper limit of remittance amount. It reads:
“If payment using stablecoins spreads, international remittances may become faster and cheaper.”
The regulatory authority of Japan believes that allowing the stablecoin distribution in the country would necessitate the establishment of more regulations related to Anti-Money Laundering controls.
Given that there are currently no crypto exchanges in Japan offering trading in stablecoins like USDT or USDC, the most recent legislation will have a powerful impact on cryptocurrency trading services offered in the country. It is important to note that the regulatory agency has already started obtaining feedback on proposals for lifting the stablecoin restrictions in the nation.
Recently, the Japanese government has been working hard to develop regulations relating to cryptocurrencies. The tax committee of Japan’s ruling Liberal Democratic Party adopted a proposal on December 15 that would exempt cryptocurrency companies from having to pay taxes on tokens issued for paper gains.
Moreover, local authorities have already advised against using algorithmic stablecoins like TerraUSD (UST). Possibly unrelated, in December last year, the FSA said that it would follow the United States for stricter laws on stablecoins.
Interestingly, Japan has gradually eased its crypto policies recently and has now shown interest in becoming a crypto hub as well. As per an earlier report from Bitnation, the world’s biggest crypto exchange, Binance, confirmed its entry into the Japanese market after four years of closing its services in the country due to regulatory concerns.
The exchange completed the 100% acquisition of Sakura Exchange BitCoin, a Japanese crypto exchange service provider, following which it can now enter Japan “as a Japan Financial Services Agency (JFSA) regulated entity.”
A crypto journalist with over 3 years of experience in DeFi, NFT, metaverse, etc. Parth has worked with major media outlets in the crypto and finance world and has gained experience and expertise in crypto culture after surviving bear and bull markets over the years.
