Japan’s Financial Services Agency (FSA) will lift a ban on the domestic distribution of foreign-issued stablecoins by 2023, local news agency Nikkei reported on December 26.
New stablecoin regulations in Japan will allow local exchanges to process stablecoin transactions with the condition of preserving assets in deposits and higher remittance limits. “If payment using stablecoins spreads, international remittances may become faster and cheaper,” the report notes.
The FSA said that allowing stablecoin distribution in Japan would also require more regulation regarding Anti-Money Laundering controls. The authorities on Monday began gathering feedback on proposals to lift the stablecoin ban in Japan. As previously reported, the Japanese parliament passed a bill banning the issuance of stablecoins by non-banks in June 2022.
The latest measure will have a significant impact on crypto trading services offered in Japan as currently, there are no local exchanges that offer trading in stablecoins like USDT or USDC.
According to official data, none of the 31 Japanese exchanges registered with the FSA — including companies like BitFlyer or Coincheck — are processing stablecoins as of Nov.30, 2022.
BitFlyer, one of the largest cryptocurrency exchanges in Japan, trades a total of five cryptocurrencies at the time of writing, including Bitcoin, Ether, Bitcoin Cash, XRP, Stellar.
Meanwhile, the maximum amount of remittances for stablecoins is proposed to be capped at 1 million yen or $7,500 per transaction. However, it is unclear which stablecoins will be returning to Japan. The U.S.-based Circle-issued USDC could be one of the stablecoins to make an entry into Japan. Tether (USDT), the largest stablecoin, could be another player.
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