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The Japanese government accepted a measure in June recognizing stable coins as a digital currency. As a result, Japan is well-known as one of the first important legal frameworks for stable coins. Howsoever, they had to be assisted by the fiat yen of Japan or some other kind of legal money that allowed holders to use them at face value and the bill, however, made no mention of overseas stable coins backed by assets like Tether.
FSA Supposedly Planning to Lift Ban on USDC Stable coins and Tether
As per a recent Coins Paid article in English, the Financial Services Agency will end its ban on the domestic sale of stable coins manufactured abroad in 2023. The Japanese Financial Services Agency [FSA] may finally decide to lift the limitations on the circulation of stable coins like Tether and USDC, according to a recent development.
The settlement cap will be set at 1 million yen ($7500) for each transaction, according to the newspaper: As per the coinpost, 2023, the Japanese Financial Services Agency may lift the ban on the exchange of stable coins issued overseas such as (USDC USDT, etc) in Japan and remittance limit will be set at 1 million yen $7500 per transaction.
By relaxing its regulations, is Japan embracing cryptocurrency?
Demand for and value of cryptocurrencies have increased. However, Governments were compelled to establish regulations regulating the sector because the market had been adopted by everyone on the planet. While some created strict restrictions that stifled innovation, other others were still working to put them into practice.
Japan was relaxing as its current cryptocurrency regulations to be more welcoming to the sector. As per recent rumors, Japan seriously planned to loosen its regulations on cryptocurrency. This time, listing digital assets were the main objective. Thus, the Asian nation seeks to entice well-known crypto exchanges from throughout the world with this move.
The Japan Virtual and Crypto assets Exchange Association [JVCEA] must currently review any exchange that wants to list a cryptocurrency. Additionally, Japan presently permits the trading of 50 or so crypto assets in the country. However, it is predicted that the more liberal law would go into force by December. As a result, there would be no need to go through the laborious process of listing a token. Following that, after submitting their listing plan, exchanges would only have 30 days to offer coins.
Starting in April, this would be further demented to two weeks. Genki Oda, vice chairman of the JVCEA, further verified the validity of these documents obtained by Bloomberg by saying,We anticipate that the most recent action will help Japan’s market for crypto assets to recover. He also said that by March 2024, pre-screenings for new Japanese currencies and tokens created through initial coin offerings might be done away with.
Will Japan become a center for cryptocurrency?
Issuers will need to assemble collateral assets in the case of domestically formed stable coins. Trusted corporations, banks, and companies offering fund transfers are the only issuers allowed. The Financial Services Agency will also require stable coin distributors to record transaction information like user identities as a money laundering prevention tool. It will begin soliciting feedback on the proposed stable coin criteria on January 26.
The position of Japan on cryptocurrencies has eventually softened over time. To strengthen Japan’s economy the New Capitalism philosophy of Japanese Prime Minister Fumio Kishida aims and the nation just made public its entry into the NFT, Metaverse space. Parallelly, the government is attempting to relax cryptocurrency tax laws.
Recently, the Japanese government has been working hard and trying its best to develop legislation relating to cryptocurrencies. However, the tax committee of Japan’s ruling Liberal Democratic Party adopted a proposal on December 15 that would have exempted cryptocurrency companies from having to pay taxes on tokens issued for paper gains. Therefore, Local authorities have already advised against using algorithmic stablecoins like TerraUSD (UST).
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