Japan’s FSA is Considering Lifting the Ban on Foreign Issued Stablecoins

Japan's FSA to Remove Ban on Stablecoins

Under the new stablecoin guidelines in Japan, local exchanges will be permitted to conduct stablecoin trade as long as deposits are made to protect assets and there is a maximum remittance amount. The paper states that International remittances could become more efficient and affordable if payment with stablecoins expands.

The FSA stated that further rules about anti-money laundering measures would be necessary in order to permit stablecoin distribution in Japan. The authorities began gathering comments on ideas for easing the stablecoin restriction in Japan on Monday. In June 2022, the Japanese parliament approved a law that would have prohibited the issue of stablecoins by non-banking organizations.

Influence of Stablecoin Trading

The most recent regulation will have a big influence on cryptocurrency trading services provided in Japan because there are presently no local exchanges that enable trading in stablecoins like USDT or USDC.

As of November 30, 2022, none of the 31 Japanese exchanges authorized with the FSA, including companies like BitFlyer and Coincheck, were facilitating stablecoin trading.

Crypto Companies to Pay Taxes

Recently, the Japanese government has been working hard to develop legislation relating to cryptocurrencies. The proposal to remove the need that cryptocurrency companies pay taxes on paper gains issued tokens was accepted by the tax committee of Japan's governing Liberal Democratic Party on December 15. In the past, regional authorities have also issued warnings against the use of algorithmic stablecoins like Terra USD (UST).