Japanese regulators are reconsidering some major cryptocurrency restrictions related to the use of stablecoins like Tether (USDT) or USD currency (USDC).
Japan's Financial Services Agency (FSA) will lift a ban on domestic distribution of foreign-issued stablecoins in 2023, according to local news agency Nikkei. reported on December 26.
New stablecoin regulations in Japan will allow local exchanges to handle stablecoin trading under the condition of asset preservation for deposits and an upper limit on remittances. โIf stablecoin payment is extended, international remittances may become faster and cheaper,โ the report notes.
Allowing the distribution of stablecoins in Japan will also require more regulations related to anti-money laundering controls, the FSA said. On Monday, the authority began collecting feedback on proposals to lift Japan's stablecoin ban. As previously reported, Japan's parliament passed a bill to ban the issuance of stablecoins by non-banking institutions in June 2022.
The latest move will have a significant impact on cryptocurrency trading services offered in Japan, as no local exchanges currently offer trading in stablecoins such as USDT or USDC.
According to official data, none of the 31 Japanese exchanges registered with the FSA, including companies like BitFlyer or Coincheck, were handling stablecoin trading as of November 30, 2022.
BitFlyer, one of the largest cryptocurrency exchanges in Japan, trade winds a total of five cryptocurrencies at the time of writing, including Bitcoin (BTC), ether (ETH), Bitcoin Cash (BCH), XRP (XRP) and stellar (XLM), according to data from CoinGecko.
The FSA did not immediately respond to Cointelegraph's request for comment.
Related: Stablecoin Settlements May Overtake All Major Card Networks By 2023: Data
The Japanese authorities have been actively working on cryptocurrency-related regulations recently. On December 15, Japan's ruling party, the Liberal Democratic Party tax committee, approved a proposal removing the requirement for crypto companies to pay taxes in paper earnings issued tokens. Previously, local regulators also issued recommendations against using algorithmic stablecoins as Terra USD (UST).
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