Japan to lift the ban on foreign stablecoins like USDT in 2023: Report
Japanese regulators are reconsidering some major cryptocurrency restrictions related to the use of stablecoins like Tether (USDT) or USD Coin (USDC).
The Financial Services Agency (FSA) of Japan will lift the ban on the domestic distribution of foreign-issued stablecoins in 2023, local news agency Nikkei reported on Dec. 26.
The new stablecoin regulations in Japan will allow local exchanges to handle stablecoin trading under the condition of asset preservation by deposits and an upper limit of remittance. “If payment using stablecoins spreads, international remittances may become faster and cheaper,” the report notes.
Allowing stablecoin distribution in Japan will also require more regulations related to Anti-Money Laundering controls, the FSA said. The authority on Monday started collecting feedback on proposals for lifting the stablecoin ban in Japan. As previously reported, Japan’s parliament passed a bill to ban stablecoin issuance by non-banking institutions in June 2022.
The latest measure will significantly impact cryptocurrency trading services offered in Japan as currently, no local exchanges provide trading in stablecoins like USDT or USDC.
According to official data, none of the 31 Japanese exchanges registered with the FSA — including firms like BitFlyer or Coincheck — were handling trading in stablecoins as of Nov. 30, 2022.
BitFlyer, one of the largest cryptocurrency exchanges in Japan, trades 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 can surpass all major card networks in 2023: Data
Japanese authorities have been actively working on crypto-related regulations recently. On Dec. 15, Japan’s ruling party, the Liberal Democratic Party’s tax committee, approved a proposal removing the requirement for crypto firms to pay taxes on paper gains issued tokens. Previously, local regulators also issued recommendations against the usage of algorithmic stablecoins like TerraUSD (UST).