thecoinrise.com
The Financial Services Agency (FSA) in Japan has reportedly announced that it will follow the methods of the U.S. regulator in terms of enhancing regulatory control for stablecoins. According to claims from a local newspaper, the FSA has issued updated restrictions around stablecoin issuance in the country, with only banks and wire transfer services being allowed to do so.
The Japanese government cited the Tether issue in the United States, stating that by restricting the issuance of Stablecoins, the government hopes to ensure the economy’s stability by avoiding widespread liquidation due to fear of the currency’s issuer declaring bankruptcy. The FSA has stated that it will implement stablecoin legislation by the next year, noting that the regulatory framework was modeled after taking inspiration from the U.S. In addition, as TheCoinRise reported, Japan also plans to establish a yen-based cryptocurrency by 2022.
Japan updates AML Restrictions
Together with the limits on Stablecoin issuance, the FSA intends to impose extra security protocols to make the decentralized industry less risky and to protect consumers. The authorities are expected to release updated and strict anti-money laundering (AML) measures, according to sources. Intermediaries engaged in stablecoin transactions, such as wallet providers, will be subject to increased regulatory scrutiny. By verifying user identity and reporting abnormal transactions, these wallet providers would be compelled to follow Japan’s law banning the flow of criminal proceeds.
The regulators in Japan are also following up on the actions towards fast issuance of crypto laws in the country.
Japan, with its huge number of crypto investors, has a lot of potential in the crypto industry. A recent survey reveals that more than 25% of Japanese crypto investors have also tried their hands on advanced digital assets like NFTs.
FSA this year also formed a new division to look after a broader market of decentralized finance (DeFi). Japan crypto exchanges also faced imminent margin trading limits in 2020 due to huge regulatory pressure.