In recent years, the cryptocurrency industry has become quite crucial for many countries around the world.
They have become key assets for countries that have been very supportive of cryptocurrencies for a while.
Among these countries is Japan which has been quite friendly and supportive towards cryptocurrencies. However, in recent years, it had to show strictness towards cryptocurrencies.
This is because things would get out of control for the country if it did not fully control and streamline the cryptocurrencies.
Therefore, in the past couple of years, the regulatory authorities in Japan have become quite strict against cryptocurrencies.
They implemented several restrictions and checks on the cryptocurrency firms and entities operating in the country. They even imposed restrictions on the stablecoins that were offered for foreign currencies.
However, it seems that the situation may change as Japan might change the way it has been operating against foreign stablecoins for a while.
The announcement by the FSA
There are reports that Japan’s Financial Services Agency (FSA) may be reconsidering its options surrounding the implementation of bans on stablecoins.
There is a possibility that the regulatory authorities in Japan might be thinking about lifting the restrictions over foreign stablecoins.
According to claims, the FSA may proceed with unbanning stablecoins such as USD Coin (USDC) or Tether (USDT).
Until now, the FSA has kept the ban implemented on stablecoins and their domestic distribution.
Therefore, none of the cryptocurrency exchanges and firms operating in Japan were allowed to offer foreign stablecoins.
However, the regulator in Japan may decide to remove the ban and let the crypto firms offer stablecoins.
The information has been shared by one of the local news agencies Nikkei on December 26.
A Condition for the Crypto Firms
Although the regulator is considering removing the ban, it is not going to remove it without implementing certain restrictions.
It is expected that the regulator may impose certain regulations and conditions for the crypto firms about the holding and offering of stablecoins.
The sources are claiming that the exchanges and the firms will be required to ensure that the stablecoin asset preservation is ensured.
They have to make sure that the stablecoin asset deposits and remittances are kept under the upper limit.
The exchanges will need to ensure that they do not breach the regulations and the conditions that are imposed on the usage and offering of the stablecoins.
The FSA Doubles Down on the AML Policy
Even though the FSA is going to allow the stablecoins to be distributed in Japan, it is going to make sure that the implementation of the anti-money laundering guidelines is stricter.
Every exchange and firm operating in Japan and aiming to offer cryptocurrencies and stablecoins must strictly adhere to the AML guidelines.
They have to ensure that the regulatory guidelines are practiced with full responsibility. Over time, they may introduce more regulatory frameworks that will provide more clarity around the AML policies.
The FSA is Collecting Feedback
The FSA has recently announced that they are open to discussions and comments from the crypto communities and the public about the unbanning.
They want feedback from the investors, locals, and crypto firms about the removal of the ban from the stablecoins.
This way, they will get a clearer picture of what the locals want and how they can make the service more favorable for them.
It was back in June 2022 when the bill was passed by the Japanese parliament for the banning of issuance and circulation of stablecoins in the country.
The option for the issuance of the stablecoins had been revoked for the entities that were not registered as banking institutions in the country.
According to a recent report published by local media sources, a total of 31 crypto exchanges operating in Japan are registered by the regulator.
None of these exchanges are involved in operating and offering stablecoins to the users.