A report that surfaced on Monday talks about Japan’s top banking manager’s plans. These plans aim to introduce new rules and regulations on the existence of stablecoins in 2022. They are purposely aiming at limiting stablecoin issuance to banks and wire transfer companies. Nikkei Asia initially reported this.
An authority will maintain the aforementioned rules and will be up for consideration by the FSA. Investors also call it as Japan’s Financial Agency. They intend these regulations to show an effort to tighten the agency’s hold on the stablecoin market. On top of that, this is also for the protection of consumers from potential asset-backed risks. Risks like some existing reserve assets like the dollar or the yen.
In another term, these regulations will help their people to actually be victims of stablecoins, much the same as Tether.
Japan Financial Agency
Japan’s Financial Agency is mirroring an almost identical scheme based on the United States’ existing regulations. In November, the President’s Working Group on Financial Markets make a public statement report pertaining to stablecoins. The Working Group includes the other people who regulate an order, and some other individuals from the Office of the Comptroller of the Currency (OCC).
In this release, they also included some recommendations to deal with stablecoin issuers comparable to banks.
Furthermore, the legislation will include a proposal to end money laundering. People suspect this laundering to have a connection and aid by stablecoins, according to the latter report. The steps they proposed include some tactics, like giving the agency further supervision over third-party providers like wallets. They also plan on adding the so-called “know-your-customer” or KYC measures.
Japan’s FSA thinks that limiting stablecoin issuance to existing banks and wire transfer companies is a remedy. This is to keep the risk low for the coin users. FSA requires banks and wire transfer companies. This is for their customers’ assets protection and safety.
Going back to January, investors expect an association of several business companies that have a count of over 70 major Japanese corporations to begin trailing a central bank digital currency, also known as CBDC. This organization will include the over 100 years of automotive innovation that has made the Mitsubishi brand famous. Many people anticipate that the digital yen that they are discussing will actually work or process in comparison to bank deposits.
Value of Stablecoins
As of October 2021, based on records, the biggest stablecoin givers issued stablecoins now valued at $127 billion. This figure was according to the news cited in the U.S. report.
Stablecoins offer potential benefits on both sides of businesses and consumers. One is to allow them to transfer money and pay for purchases with very low transaction costs.