Japan is about to lift the ban on stablecoins, what impact will it have on the market?

Can Japan Inject New Money into the Crypto Market?

Written by: 0xAyA

Hong Kong is not the only country that has helped the development of Crypto from a policy perspective. Just yesterday, Japan implemented the revised "Fund Settlement Law" and defined stablecoins as a new "electronic payment method", which further clarified the status of stablecoins in Japan's legal framework and formulated detailed rules To regulate the issuance and use of stablecoins in Japan, what changes and opportunities will the implementation of this policy bring to the market? Odaily Planet Daily will make the following interpretations in conjunction with Financial Services Agency documents and relevant laws and regulations.

Bill Details

To put it simply, the revised "Fund Settlement Law" divides digital currencies into "digital currency-like" and "encrypted assets". The stablecoins of China are included in the category of "quasi-digital currency" and are classified as foreign exchange transactions. Therefore, the issuers of such stablecoins will be limited to domestic banks, transfer service providers and trust associations, and the new regulations will impose strict restrictions on issuers and agents. There are clearer regulations that only agents who have obtained an electronic payment license can participate in the issuance of this type of stable currency.

For stablecoins issued overseas, their supervision is mainly done through agents in Japan. Agents are obliged to protect clients’ assets during this period. At the same time, from the perspective of anti-money laundering, the Financial Services Agency can require them to provide transfer records for inquiries.

The algorithmic stable currency is classified into the category of "encrypted assets", and its management method is the same as that of other digital currencies. For the detailed content of "Fund Settlement Law", please refer to the official website link.

Industry Attitude

In fact, as early as a few months ago, banks in Japan had already participated in stablecoin-related businesses. On March 2, GUTechnologies announced that it would cooperate with Shikoku Bank, Tokyo Kiraboshi Financial Group and Minna no Bank to develop stablecoins. Experiment, issue stable coins on the Japan Open Chain through the management issuance system developed by it.

Mitsubishi UFJ Trust announced on the 28th of this month that it will launch a technical alliance with Datachain and conduct a "PVP payment" experiment, with the purpose of realizing the mutual transfer and exchange between various stablecoins issued domestically in the future.

It is not difficult to see that the traditional financial sector is generally open and positive towards the new stablecoin regulations, and is actively cooperating with companies in the Web3 field to explore future business in this area. Promotion and use provide reliable support and credibility endorsement.

The latest attitude towards stablecoins in other regions

The U.S. House of Representatives held a stablecoin hearing on May 18. The Republican and Democratic parties had a heated debate on the draft stablecoin bill, with the main focus of conflict being the regulatory powers of states and the federal government. The bill promoted by the Republican Party advocates allowing stablecoin operators to choose to register in any state without going through the Federal Reserve Board, and states are free to set their own standards; while the Democratic Party advocates that the Federal Reserve System play a leading role and have the final decision. And require publishers to comply with more terms to regulate the industry, the two sides have not yet reached a final consensus.

The EU will formulate detailed rules for the implementation of MiCA (EU Encrypted Asset Market Regulations) in the next few months, which also puts forward a series of conditions for stablecoin issuers, including obtaining official licenses and having certain reserves, etc. In addition, The head of the European Banking Authority said last month that "central banks should have the power to veto the widespread introduction of so-called stablecoins" and that "all issuers would be subject to a strong authorization and regulatory framework".

Conclusion

The lifting of the ban on stablecoins will bring new opportunities to the local Crypto market in Japan, and the regulation and promotion of the stablecoin business dominated by traditional finance will undoubtedly be easier and more convenient, which also brings new challenges to these institutions. How much impact will the revised law have on the market? Odaily Planet Daily will continue to pay attention.

Reference link

The amended Payment Services Act, which came into effect on June 1, will allow the issuance of domestic stablecoins, which will bring benefits to multinational companies.

Bill to partially revise the Fund Settlement Act to build a stable and efficient fund settlement system Explanatory material

Full Text of Fund Settlement Law