Japan’s Financial Services Agency (FSA) plans to tighten regulation of stablecoins by imposing strict rules on its issuers.
The Financial Services Agency (FSA) added that the FSA will also strengthen regulations related to the prevention of money laundering, and pointed out that crypto service providers involved in stablecoin transactions, including wallets, will also be subject to supervision by financial regulators.
In addition, stablecoin issuers will be required to comply with Japan’s laws on preventing the transfer of criminal proceeds. This includes verifying user identities and reporting suspicious transactions.
At the time of writing, the total market value of all stablecoins is close to $160 billion. Tether (USDT) is the largest stablecoin in circulation. According to data from Bitcoin.com Markets, the current market value is 76.58 billion U.S. dollars.
Although Japan currently does not have laws regulating stablecoins, the FSA has established a team to study how to best ensure consumer protection and solve money laundering problems in this area.
In September, Yuri Okina, a member of the panel, stated: “It is important that stablecoins are backed by safe, liquid assets. However, it is questionable whether it is the right approach to formulate a package of rules as strict as those currently applicable to banks.”
Japan is not the only country that plans to impose strict regulations on stablecoin issuers. In July, Secretary of the Treasury Janet Yellen (Janet Yellen) asked the regulators that oversee U.S. crypto assets to “act quickly” to regulate stablecoins. The President’s Financial Markets Working Group (PWG) subsequently recommended the implementation of bank-like supervision on stablecoin issuers.
However, not everyone agrees with this method of supervision. In November, Fed Governor Christopher Waller opposed the PWG’s proposal. He explained that he could allow banks to issue stablecoins, but he did not agree to only allow banks to issue stable coins.