While countries worldwide are increasingly becoming less hostile to crypto, some still have their reservations about it. Recently, the top financial regulator of Japan proposed changes to regulation that could affect stablecoin issuers.
Japan’s Financial Services Agency (FSA) is planning to impose strict rules to tighten the regulation of stablecoin issuers. According to Nikkei,
“The Financial Services Agency seeks to propose legislation in 2022 to restrict the issuance of stablecoins to banks and wire transfer companies.”
FSA is also planning to tighten regulations regarding the prevention of money laundering. Moreover, they also noted that crypto service providers involved in stablecoin transactions would also come under the regulator’s oversight.
Alongside this, stablecoin issuers will have to follow the law of Japan about preventing transfers of criminal proceeds. All this includes verification of user identities and reporting suspicious transactions.
Although Japan doesn’t have a law regarding stablecoins, FSA has established a panel. The panel will try to attain the best possible scenario for stablecoins to ensure consumer protection and address money laundering concerns in this space.
Previously, a member of that panel, Yuri Okina, spoke about the importance of stablecoins but the requirement of regulations with it:
“It’s important that stable coin is backed by secure, liquid assets. But it’s questionable whether setting blanket rules as strong as those currently applied to banks is the right approach.”
Japan isn’t the only country planning to regulate stablecoins. A couple of months back, Treasury Secretary of the United States, Janet Yellen, asked regulators observing crypto assets to “act quickly” to regulate stablecoins. Moreover, the country’s working group on financial markets recommended bank-like regulations on stablecoin issuers.