The Japanese government is reviewing significant cryptocurrency regulations related to the use of stablecoins like Tether USDT/USD and USD Coin USDC/USD, according to a report.
Japan's Financial Services Agency will end its ban on the domestic circulation of foreign-issued stablecoins in 2023, allowing local exchanges to handle stablecoin trade under the conditions of asset preservation through deposits and a maximum remittance limit, local news outlet Nikkei reported.
“If payment using stablecoins spreads, international remittances may become faster and cheaper,” according to the report.
The FSA has stated that further laws regarding anti-money laundering measures will be necessary to permit stablecoin distribution in Japan.
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On Monday, the authorities began collecting feedback on ideas for easing the stablecoin restriction in Japan, which was approved by the Japanese parliament in June 2022.
The new legislation will have a significant impact on cryptocurrency trading services in Japan, as none of the 31 registered exchanges, including BitFlyer and Coincheck, were handling stablecoin trading as of Nov. 30.
In the past, the Japanese government has actively worked on developing cryptocurrency-related legislation, including a proposal by the tax committee of the ruling Liberal Democratic Party to exempt cryptocurrency companies from paying taxes on tokens issued for paper gains.
Local authorities have also advised against using algorithmic stablecoins like Terra USD USTC/USD.
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