The FSA is working towards allowing specific stablecoins to operate in Japan for usage and will implement the same by June 2023.
According to new regulations, Japan is expected to allow certain stablecoins to be used in the country for trading. By June 2023, the ban will be lifted on stablecoins, which the Financial Services Agency (FSA) is working on. A spokesperson confirmed that lifting the ban would not mean all foreign products of stablecoins would be allowed to be used.
To be passed for use in Japan, stablecoins would be subject to stringent checks to ensure safety for users, and foreign issuers would be exposed to the same regulations in Japan, with the safekeeping of the underlying assets. The FSA did not specify which stablecoins would be allowed.
An FSA spokesperson said, “It is scheduled to be promulgated and enforced through necessary procedures upon closure of the public comment, therefore, the exact date is not decided yet,” referring to the fact that FSA would also be accepting public views and comments on the Payment Services Act amendments till January 31. The new regulations are part of the same amendments of the Act, which was introduced in December 2022.
Earlier, Japan had banned all stablecoins not linked to the Japanese yen but revered the order subsequently. But a note of concern is that none of the crypto firms in Japan have operations for stablecoins.