Japan wants to have stablecoin issuers registered as banks, according to a report

• According to a report by Nikkei Asia, Japan’s Financial Services Agency said on Monday that it plans to limit the issuing of stablecoins to banks and wire transfer providers in 2022
• According to CoinGecko, stablecoins had a total market cap of $160 billion and $80 billion in trading volume in the previous 24 hours as of Tuesday afternoon
• According to Nikkei Asia, the FSA also intends to regulate crypto transaction middlemen such as wallet providers

According to a report by Nikkei Asia, Japan’s Financial Services Agency said on Monday that it plans to limit the issuing of stablecoins to banks and wire transfer providers in 2022. Limiting stablecoin supply to banks and wire transfer firms, according to the FSA, will help decrease concerns because these companies are legally obligated to preserve customer assets. Tether, for example, would be unable to supply stablecoins to Japanese businesses and individuals unless they were registered as banks or wire transfer providers. In the United States, regulators are pushing for similar regulations.

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According to CoinGecko, stablecoins had a total market cap of $160 billion and $80 billion in trading volume in the previous 24 hours as of Tuesday afternoon. Tether (USDT) currently controls 50% of the stablecoin market, followed by U.S. Dollar Coin at 27% and Binance USD at 9%. U.S. investigators are looking into Tether’s assertions that all of its stablecoins are backed by dollar reserves. Later, the corporation revealed that commercial paper, or short-term corporate debt, makes up a percentage of its reserves. Tether claimed in September that it did not hold any of Evergrande’s debt as the Chinese property developer battled to fulfill debt payments to 171 domestic banks and 121 other financial firms.

According to Nikkei Asia, the FSA also intends to regulate crypto transaction middlemen such as wallet providers. Companies that facilitate transactions will be forced to verify their users’ identities and report suspicious activity to the FSA to avoid money laundering under the new arrangement.

Meanwhile, a group of 70 Japanese corporations, including the country’s largest banks, is rumored to be testing their own bank deposit-backed digital money next year. The stablecoin, dubbed DCJPY, will go through its first round of testing this year. MUFG Bank, Sumitomo, Mitsui Banking Corp., Mizuho Bank, and Japan Post Bank are among the members of the Digital Currency Forum, which is leading the endeavor. However, the FSA and the Bank of Japan have stated that they will merely be there as spectators during the test.