Japan plans to introduce regulations by June this year that will allow domestic investors to trade certain stablecoins issued overseas, Cointelegraph reported, citing the country’s regulator, the Financial Services Agency (FSA).
See related article: Japan’s Web 3.0 lawmaker urges further easing of country’s crypto regulation
Fast facts
- Once the new regulations are in place, the FSA will examine stablecoins for compliance, including having the required assets to back the stablecoin and ensure user protection, an FSA spokesperson told Cointelegraph.
- The FSA declined to confirm whether popular stablecoins such as Tether or USDC will be accepted in Japan under the new rules.
- The revamp of the regulations – which overturns a ban on stablecoins introduced in June last year – is seen as part of efforts by Japan Prime Minister Fumio Kishida to support digital finance and Web3 adoption in his strategy to reinvigorate the economy in what he has called “new capitalism.”
- Japan’s stablecoin ban came a month after the US$40 billion collapse of the Terra-Luna stablecoin run by Singapore-based Terraform Labs, which caused losses to hundreds of thousands of investors around the world.
- Cryptocurrency exchanges Kraken and Coinbase have since shuttered operations in Japan, citing local market conditions.
See related article: Coinbase asks Japan customers to withdraw holdings as it halts operations