For a long time, the largest stablecoin Tether (USDT), has been banned from being offered or used in Japan. The authority that made it happen was the Financial Services Agency (FSA).
The regulatory authority from Japan is the one responsible for the regulation of cryptocurrencies and crypto firms in the country.
For a long time, it has continued banning the usage of all major stablecoins in the country. However, there are chances that the situation may change as the FSA may change all of it in the year 2023.
FSA to Authorize Until June 2023
There are now speculations that Japan is making changes to the regulations governing the cryptocurrency industry.
The new regulations have a unique section for the stablecoins that simply authorizes their use in the Japanese crypto markets.
The report specifically talks about USDT, the largest stablecoin. It suggests that the new regulations will be implemented as the second quarter of 2023 comes to a close, inducting USDT as an authorized stablecoin.
No More Ban on Stablecoins
There are reports confirming that the domestic distribution of stablecoins will be unbanned in Japan. However, the FSA is not going to go all out on the unbanning of the stablecoins.
Instead, the financial regulatory authority may authorize the distribution of the major stablecoins in the cryptocurrency industry.
The regulator may allow the distribution of the major stablecoins by the mid of the running year.
Stablecoins will go through Several Checks
One of the spokespersons from the FSA has made it clear that only the stablecoins that make it through the thorough checking processes will be allowed to operate.
The authorities will be carrying out very thorough and individual checks on each stablecoin. They have to go through the process before they can be fully reviewed and then authorized to operate.
If a particular stablecoin does not meet the requirements, then it will not be inducted as an authorized stablecoin. If it is authorized, then the exchanges can offer it for distribution and all sorts of purposes.
Their major check is to ensure that the stablecoins make it through the protection viewpoint of the users. If they do, they will be inducted as authorized and registered stablecoins.
Will the Major Stablecoins Make it to the List?
Although the new regulations specifically talk about the USDT, it does not mean that it is not to go through the approval process.
It has to pass the checking process as well and if it does not, then it will not be allowed to operate in the country.
Therefore, the investors must have their fingers crossed and hope that their favorite and the most prominent stablecoins pass the tests/checks.
If they pass the checks, they will be allowed to operate openly and without any problems. Surprisingly, there is no way to gain insight on the matter as the FSA is always very strict with information and data leakage.
It ensures that none of its partners or members leak out the information. Therefore, it is impossible to know which stablecoins have made it through the list and which stablecoins have been held back.
Nothing can be promised about the future of the stablecoins until the FSA announces the final decision.
Amendments in the Payment Services Act (2022)
Just recently, new amendments were proposed for the Payment Services Act (2022). These amendments also included the cryptocurrency industry and the regulation of crypto assets.
The amendments require each digital asset to be categorized as its nature and function. When that is done, the assets are to be registered before they can start operating.
It has been confirmed that the comments on the new amendments will be collected by the FSA until the end of January 2023.
Although it will have the operators of many stablecoins on their toes, it is going to be a hugely positive step for the stablecoin industry in the future.