Japan passes bill to limit stablecoin issuance to banks and trust companies

Blockonomics
Japan passes bill to limit stablecoin issuance to banks and trust companies
Blockonomics



Japan is advancing legislation on the issuance of stablecoins, digital assets whose value is pegged to fiat currency or stabilized through algorithms.

On Friday, Japan’s parliament passed a bill banning the issuance of stablecoins by non-banks, local news outlet Nikkei reported.

The bill reportedly restricts the issuance of stablecoins to licensed banks, registered remittance agents and trust companies in Japan.

The new legislation also introduces a registration system for financial institutions to issue such digital assets and provides anti-money laundering measures.

Binance

According to the report, the bill aims to protect investors and the financial system from the risks associated with the rapid adoption of stablecoins, whose market size has soared to 20 trillion yen, or more than $150 billion.

The new legal framework will reportedly take effect in 2023, and the FSA plans to introduce regulations for stablecoin issuers in the coming months.

Related: UK Government Proposes Additional Safeguards Against Risk of Stablecoin Failure

Japan’s stablecoin bill comes after the collapse of the Terra token caused a sharp drop in the cryptocurrency market, with the algorithmic stablecoin Terra USD (UST) falling 1:1 against the U.S. dollar in early May.

The stablecoin market turmoil is not unique to the Terra blockchain, as other algorithmic stablecoins such as DEI also subsequently lost their peg to the U.S. dollar, plummeting to $0.4 in late May.



Source link

fiverr

Be the first to comment

Leave a Reply

Your email address will not be published.


*