Japanese regulators are reconsidering some major cryptocurrency restrictions related to the use of stablecoins. The Financial Services Agency of Japan will lift the ban on the domestic distribution of foreign-issued stablecoins in 2023.
The new stablecoin regulations in Japan will allow local exchanges to handle stablecoin trading under condition of asset preservation by deposits and an upper limit of remittance.
Allowing stablecoin distribution in Japan will also require more regulations related to Anti-Money Laundering controls, the FSA said. The authority on Monday started collecting feedback on proposals for lifting the stablecoin ban in Japan. As previously reported, Japan’s parliament passed a bill to ban stablecoin issuance by non-banking institutions in June 2022.
The latest measure will significantly impact cryptocurrency trading services offered in Japan as currently no local exchanges provide trading in stablecoins like USDT or USDC.
According to official data, none of 31 Japanese exchanges registered with the FSA including firms like BitFlyer or Coincheck were handling trading in stablecoins as of Nov. 30, 2022.
Japanese authorities have been actively working on crypto-related regulations recently. On Dec. 15, Japan’s ruling party, the Liberal Democratic Party’s tax committee, approved a proposal removing the requirement for crypto firms to pay taxes on paper gains issued tokens.
