- Japan’s Financial Services Agency, or FSA, will propose regulations next year restricting stablecoin issuance to only banks and wire transfer firms, according to The Nihon Keizai Shimbun
- In response to a regulatory crackdown, Circle, the issuer of the USD Coin (USDC), aims to become a crypto bank chartered in the United States
- Regardless of how clever private stablecoins are, they compete directly with central bank digital currencies, or CBDCs, and their adoption
Japan’s Financial Services Agency, or FSA, will propose regulations next year restricting stablecoin issuance to only banks and wire transfer firms, according to The Nihon Keizai Shimbun (Nikkei), one of the world’s leading financial newspapers and the company behind the Nikkei 225 stock index. This would theoretically preclude companies like Tether, which is not a bank and is only regulated in the British Virgin Islands, from doing business with Japanese clients.
However, only select stablecoin issuers would be affected by the new proposed laws. In response to a regulatory crackdown, Circle, the issuer of the USD Coin (USDC), aims to become a crypto bank chartered in the United States. Stablecoin issuers are often exempt from financial reporting, auditing, or regulatory scrutiny while functioning as private corporations, leading to speculative accusations that Tether may not have enough reserves to back USDT. In addition, the FSA intends to tighten restrictions for both stablecoin issuers and wallet providers in areas like blocking the transfer of illegal proceeds, validating user identities, and reporting suspicious transactions.
Regardless of how clever private stablecoins are, they compete directly with central bank digital currencies, or CBDCs, and their adoption. By the end of next year, Japan’s central bank wants to introduce the digital yen, called the ‘DCJPY.’ It is backed by a group of roughly 70 companies, including some of the country’s top financial institutions, which have all agreed to participate in a DCJPY experiment. The ‘GYEN,’ a stablecoin digital yen now in circulation, and another imminent launch backed by Circle are both in the works.
Steve Anderson is an Australian crypto enthusiast. He is a specialist in management and trading for over 5 years. Steve has worked as a crypto trader, he loves learning about decentralisation, understanding the true potential of the blockchain.