What impact will Japan's upcoming lifting of the ban on stablecoins have on the market?

Hong Kong is not the only country that is promoting the development of Crypto from a policy perspective. Just yesterday, Japan implemented the revised "Fund Settlement Law" and defined stablecoins as a new "electronic payment method", further clarifying the status of stablecoins in the Japanese legal framework and formulating detailed rules to regulate the issuance and use of stablecoins in Japan. What changes and opportunities will the implementation of this policy bring to the market?

Details of the bill

Simply put, the revised "Funds Settlement Law" divides digital currencies into "quasi-digital currency" and "crypto assets". The focus of this revision of the bill is to separate the former - stablecoins such as USDT that are exchanged for legal tender are included in the "quasi-digital currency" type and classified as foreign exchange transactions. Therefore, the issuers of such stablecoins will be limited to domestic banks, transfer service providers and trust companies, and the new regulations have clearer provisions for issuers and agents. Only agents who have obtained electronic payment licenses can participate in the issuance of such stablecoins.

For stablecoins issued overseas, supervision is mainly done through agents in Japan. During this period, agents are obliged to protect customers' assets, and the Financial Services Agency can ask them to provide transfer records for inquiry from the perspective of anti-money laundering.

Algorithmic stablecoins are classified as "crypto assets" and are managed in the same way as other digital currencies. For detailed information on the "Funds Settlement Law", please refer to the official website link.

Industry attitude

In fact, as early as a few months ago, banks in Japan have already participated in stablecoin-related businesses. On March 2, GUTechnologies announced that it would cooperate with Shikoku Bank, Tokyo Kiraboshi Financial Group and Minna no Bank to carry out stablecoin experiments and issue stablecoins on Japan Open Chain through the management and issuance system it developed.

Mitsubishi UFJ Trust announced on the 28th of that month that it had established a technical alliance with Datachain and was conducting a "PVP payment" trial in order to enable mutual transfers and exchanges between various stablecoins issued domestically in the future.

It is not difficult to see that traditional finance is generally open and positive about the new stablecoin regulations, and is actively cooperating with companies in the Web3 field to explore future business in this area. Their participation also provides reliable support and credibility endorsement for the promotion and use of stablecoins in Japan.

The latest attitudes towards stablecoins in other regions

The U.S. House of Representatives held a stablecoin hearing on May 18, and the Republican and Democratic parties had a fierce debate on the draft stablecoin bill, with the main focus of the conflict being state and federal regulatory power. The bill promoted by the Republicans advocates allowing stablecoin operators to choose to register in any state without going through the Federal Reserve Board, and that states can freely set their own standards; while the Democrats advocate that the Federal Reserve System play a leading role and have the final say, and require issuers to comply with more terms to regulate the industry. The two sides have not yet reached a final consensus.

The EU will formulate and implement detailed rules for MiCA (EU Crypto-Asset Market Regulation) in the coming months, which also puts forward a series of conditions for stablecoin issuers, including obtaining official licenses and having certain reserves. In addition, the chairman of the European Banking Authority stated last month that "central banks should have the right to veto the widespread introduction of so-called stablecoins" and that "all issuers will be subject to a strong authorization and regulatory framework."

Conclusion

The lifting of the ban on stablecoins will bring new opportunities to Japan's local Crypto market, and the stablecoin business dominated by traditional finance will undoubtedly be easier and more convenient to regulate and promote. This also brings new challenges to these institutions. How much impact can the revised laws have on the market?