Japan\’s financial regulators may propose legislation in 2022 restricting stablecoin issuance

Japan\'s financial regulators may propose legislation in 2022 restricting stablecoin issuance

According to The Nihon Keizai Shimbun (Nikkei), one of the world\’s largest financial newspapers and the entity behind the Nikkei 225 stock index, Japan\’s Financial Services Agency, or FSA, will propose legislation next year restricting stablecoin issuance to only bank and wire transfer companies. Theoretically, this would prevent entities such as Tether (USDT), which does not operate as a bank and is only regulated in the British Virgin Islands, from conducting business with Japanese customers.

However, the new proposed rules would only affect some stablecoin issuers. For example, USD Coin (USDC) issuer Circle plans to become a crypto bank chartered in the United States amid a regulatory crackdown. While operating as private companies alone, stablecoin issuers are typically exempt from financial reporting, auditing or regulatory oversight, leading to notable speculative claims that Tether may not have enough reserves to back USDT.

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