Japanese lawmakers pass stablecoin bill to safeguard crypto investors

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Japanese lawmakers pass stablecoin bill to safeguard crypto investors
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Japanese lawmakers passed a stablecoin bill on Friday to protect crypto investors. The bill came a month after the TerraUSD (UST) stablecoin crashed, which caused investors to lose billions of dollars as the stablecoin depreciated.

The TerraUSD debacle made most countries think of another way to legalize cryptocurrencies. Japan, one of the largest countries in terms of economic size, has been at the forefront of pushing for crypto regulations, and if the bill is signed into law, Japan will be the first to develop regulations for stablecoins.

A stablecoin is a digital asset whose value is pegged to a real asset such as gold or the U.S. dollar to keep prices stable. Currently, the total market capitalization of all stablecoins is around $160 billion.

What the new Japanese stablecoin bill contains

Under the bill, stablecoins will now be considered virtual currencies pegged to the Japanese yen or any other fiat currency to ensure investors can exchange them at current prices.

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Additionally, the bill states that stablecoins can only be issued by trusted companies, registered remittance platforms, and licensed banks. However, existing assets backed by stablecoins such as Tether and their corresponding stablecoins are not covered by the legislative act.

Notably, the bill was developed by Japan’s Financial Services Agency (FSA) and is expected to pass the House of Representatives by the end of 2021. Parliament accepted the bill in mid-March 2022 and it was officially passed today.

Additionally, cryptocurrency trading platform FTX Trading Ltd today announced the launch of FTX Japan, which will serve Japanese consumers.



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