© Reuters
Investing.com – Japan became one of the first major countries to establish a legal framework for stablecoins in June. Six months later, it takes another crucial step to amend the existing ban, as the Financial Services Agency (FSA) plans to lift the ban on stablecoins issued abroad. It is still unclear which tokens will be made available. However, USDC, backed by Circle and Coinbase (NASDAQ:), and USDT are expected to make a comeback.
Under the new rules, distributors will be responsible for managing stablecoins on behalf of foreign issuers to protect their value. Digital asset exchanges across the country will be able to handle stablecoin exchanges subject to asset preservation through deposits and an upper remittance limit.
The FSA will require stablecoin distributors to record transaction details, such as usernames, as part of anti-money laundering (AML) measures. The FSA has proposed capping the maximum amount of funds transfers at 1 million yen (or $7,500 per transaction).
On the other hand, for locally issued stablecoins, the issuer will be required to prepare assets as collateral. In addition, only banks, remittance service providers and trust companies can be issuers in the Japanese market.
This summer, Japan’s parliament passed a bill to ban the issuance of stablecoins by non-bank institutions and stipulated that issuance should be limited to licensed banks, registered money transfer agents, and money transfer companies. trust in Japan.
The bill was introduced after the implosion of TerraUSD which triggered liquidity issues in the market. Despite this, the FSA made no mention of algorithmic stablecoins in what was considered landmark legislation.
In December, the Japanese regulator published a document that highlighted its intention to restrict algorithmic stablecoins. According to Japan’s Deputy Minister for International Affairs, Tomoko Amaya, recommendations have been made by the FSA which seeks to address the position on algorithmic stablecoins for the first time.
“The proposed revision states that “global stablecoins must not use algorithms to stabilize their value” and strengthens the guarantee of redemption rights.”