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Significant cryptocurrency regulations relating to stablecoins, including Tether and USDC, are being reexamined by Japanese financial officials.
According to a local news outlet Nikkei, Japan’s Financial Services Agency (FSA) will change legislation to allow the circulation of stablecoins next year. According to the new stablecoin regulations in Japan, local exchanges will be allowed to trade stablecoins both domestic and foreign-issued. This change in legislation will stand provided the cryptocurrencies are preserved through deposits and there is a maximum remittance amount. According to the news report, the use of stablecoins could help global payments; an idea that the Japanese FSA is willing to explore:
“If payment using stablecoins spreads, international remittances may become faster and cheaper.”
According to the FSA, further laws regarding anti-money laundering measures will be necessary in order to permit stablecoin distribution in Japan. This will include research and user and citizen commentary. On Boxing Day, the authorities began gathering comments on ideas for easing the stablecoin restriction in Japan.
Recently, the Japanese government has been working hard to develop legislation relating to cryptocurrencies. The tax committee of Japan’s ruling Liberal Democratic Party adopted a proposal earlier in December that would have exempted cryptocurrency companies from paying taxes on tokens issued for paper gains.
In June 2022, the Japanense financial authorities put a law in place to prohibit stablecoin issuance by non-banking institutions. This means that there are currently no local exchanges offering trading in stablecoins like USDT or USDC. None of the exchanges officially registered with the FSA are handling any sort of stablecoin trading. BitFlyer, one of the biggest cryptocurrency exchanges in Japan, trades a total of five cryptocurrencies including Bitcoin, Ethereum, Bitcoin Cash, XRP, and Stellar. This recent change in legislation will likely have a substantial influence on cryptocurrency trading services provided in Japan.