Japan will refuse to support stable coins
2022.12.07 05:49
Japan will refuse to support stable coins
Budrigannews.com – Subsequent to passing its milestone regulation on stablecoins in June, Japanese controllers are thinking about supplementing it by confining the algorithmic support of stablecoins. The country’s Vice Minister for International Affairs, Tomoko Amaya, reiterated the intention, which is based on a recommendation from the Financial Service Agency (FSA).
Amaya presented Japan’s regulatory framework during his speech on crypto assets at a roundtable hosted by the Official Monetary and Financial Institutions Forum (OMFIF), focusing on financial stability, user safety, and anti-money laundering/countering the financing of terrorism (AML/CFT). Although the speech was originally given in November, the FSA only made the full document available on December 7.
The Banking Act, the Payment Services Act, and the Financial Instruments and Exchange Act are the three major pieces of legislation that make up the Japanese approach to crypto regulation, which is presented in a 29-page presentation. Although the emphasis on distinguishing between “crypto assets” and “digital-money type stablecoins” provides a distinct perspective on the local regulators’ approach to the latter, one familiar with the Japanese regulatory environment could not find anything new at this point.
Additionally, neither specific dates nor headlines for future legislation are mentioned in Amaya’s speech. However, the Vice Minister cites the FSA recommendations, which were reportedly made in October, in the “Way Forward” section at the document’s conclusion. As the saying goes,
“The proposed review states that ‘global stablecoins must not use algorithms in stabilizing their value’ and strengthens the ensuring of redemption rights.”
Because the current stablecoins regulation, which was passed by Parliament in June and will become law in June 2023, does not include algorithmic stablecoins, lawmakers will probably take this suggestion into consideration in the future. The bill itself was passed shortly after the algorithmic stablecoin Terra USD (UST) lost its 1:1 value to the US dollar at the beginning of May, fueling a massive decline in cryptocurrency markets.
