At present there is no regulation in Japan to keep a check on the stablecoin wallet storage and transaction monitoring. This poses a threat of using stablecoins as a means of money laundering and crimes. Thus, the Financial Service Agency of Japan proposes to restrict the issuance of stablecoins to Banks and Wire Transfer Companies.
In a publication today the FSA (top financial regulatory authority of Japan) proposed strict regulation on the stablecoins and their usage. The agency published
“The Financial Services Agency seeks to propose legislation in 2022 to restrict issuance of stablecoins to banks and wire transfer companies.”
FSA proposed that the stablecoin transactions including storing and transferring to wallets will also be brought under scrutiny and the stablecoin issuers will be liable to comply with Japan’s law of preventing transactions of criminal proceeds. The issuers will be made liable to verify the user identities using their services along with their wallet addresses.
Total market cap of stablecoins is above $152 Billion at the time of writing with USD Tether (USDT) with the highest market cap among the stablecoins.
Japan has no regulatory laws to govern the stable coin issuance and transactions at the moment and the financial agency has concerns over the money laundering acts through the use of stablecoins and thus such regulation is warranted. Japan is not the only country who is looking for a regulation of stable coins, the US and other major countries are also creating a blueprint for such regulations.
Disclaimer: The article is just to provide information and shouldn’t be considered as any financial advice. It is advisable to conduct thorough research before investing in any cryptocurrency.
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