A local financial body in Japan has said that the country’s new legislation that will let investors to trade using stablecoins such as Tether (USDT) are scheduled to be approved no later than in June 2023 at the very latest.
The Financial Services Agency (FSA) of Japan is working on removing the restriction on the domestic distribution of stablecoins and has tentative plans to make this change before the end of the year for certain stablecoins.
The spokesman for the FSA noted that the organisation would only approve stablecoins that are successful in passing individual inspections designed to ensure that such cryptocurrencies are protected from the perspective of user protection.
The representative went on to say that other examples include international issuers in their own countries being subject to identical restrictions in Japan, with underlying assets being safeguarded in an acceptable manner.
Additionally, the authorities emphasised that there is no possibility of knowing if major stablecoins like as Tether (USDT) or USD Coin (USDC) would be permitted. This point was emphasised several times. According to the spokesman, “FSA does not give any option to obtain such material before the decision is taken.”
The new stablecoin laws that have been suggested for Japan are included in the proposed cabinet orders and cabinet office ordinances that are related to the change to the Payment Services Act of 2022.
The new regulations are going to be implemented in December 2022, and its primary goals are to lay out the standards for electronic payment instruments and create the registration processes that are associated with them.
The official data indicates that the FSA will continue to take public opinions about the modifications to the Payment Services Act through the 31st of January in 2023. A spokeswoman for the FSA said that the specific date has not yet been agreed upon since the regulation is planned to be published and implemented via the relevant processes once the closing of the public comment period.
FSA said that the deadline for law enforcement is going to be at the beginning of June.
According to earlier reports, the Diet of Japan has approved a measure that will go into effect in June 2022 and prohibit the use of foreign stablecoins. The bill also requires stablecoin issuers to connect their cryptocurrencies solely to the Japanese yen or another legal denomination.
It would seem that a number of cryptocurrency companies have been adversely affected by the new regulations, since none of the 31 Japanese exchanges that are registered with the FSA have subsequently provided stablecoin operations. The legislation is scheduled to go into force in 2023.
Because of the lacklustre state of the cryptocurrency market in Japan, a number of prominent cryptocurrency exchanges, including Coinbase and Kraken, have recently suspended their operations there.