In the sequel of its plan to lift the ban on foreign stablecoins like USDT, the Financial Service Authority in Japan is expected to approve new legislation by June 2023, which will allow the use of certain stablecoins for trading.
According to a local financial body, Japan’s new legislation permitting investors to trade using stablecoins like Tether (USDT) is anticipated to be approved no later than June 2023.
With plans to permit certain stablecoins later this year, the Financial Services Agency (FSA) of Japan is aiming to ease the restriction on the domestic distribution of stablecoins.
A spokeswoman for Japan’s FSA issued a statement saying, “This does not imply that all foreign goods of so-called “stablecoins” would be accepted without any restrictions.”
The FSA spokesman said that the agency would only approve stablecoins that successfully pass specific tests proving that such cryptocurrencies are secure from the perspective of user safety.
The representative said, “Examples include international issuers in their nations being subject to comparable restrictions in Japan, with underlying assets duly maintained.”
The regulator emphasized that it is impossible to predict if popular stablecoins like Tether USDT or USD Coin would be permitted. The agent replied, “FSA does not allow any option to examine such material prior to the decision being taken.”
The proposed cabinet orders and cabinet office ordinances on revising the Payment Services Act of 2022 include new stablecoin laws for Japan.
The new regulations, which will go into effect in December 2022, are intended to define specifications for electronic payment instruments and provide the necessary registration processes.
Official information indicates that through January 31, 2023, the FSA will receive public opinions about revisions to the Payment Services Act.
According to an FSA spokeswoman, the specific date has not yet been determined. “It is planned to be published and implemented via relevant processes following the closing of the public comment,” the spokesperson added. The law enforcement deadline, according to FSA, is scheduled for early June.
As was previously reported, a law to prohibit foreign stablecoins was approved by the Japanese parliament in June 2022, limiting stablecoin issuers to exclusively connect their digital currency to the Japanese yen or another legal cash.
The new regulation, which is scheduled to go into force in 2023, seems to have had an impact on many crypto businesses since none of the 31 Japanese exchanges that have registered with the FSA have subsequently provided stablecoin operations.
Some major cryptocurrency exchanges, such as Coinbase and Kraken, have stopped operating in Japan due to the country’s struggling cryptocurrency sector.
