Japan proposes limits on stablecoin issuance

The Japanese Financial Services Agency (FSA) has proposed imposing caps and restricting the list of stablecoin issuers to banks and money-transfer services, according to sources cited by Nikkei.

The regulator is expected to prepare the proposals in 2022.

The initiative arose as preparations for a detailed project for the digital yen were under way toward the end of 2022.

According to the publication, wallet operators could fall under the FSA’s supervision. They, like issuers of stablecoins, would be required to identify users’ personal data and report suspicious transactions to prevent money laundering.

Such requirements could, in particular, curb Tether’s activities in Japan, which does not hold the necessary licences.

In November, one of the operators of the USD Coin (USDC), Circle announced the launch of a stablecoin pegged to the Japanese yen.

In August, Jeremy Allaire said that Circle would become a ‘commercial cryptocurrency bank with full reserves’.

Earlier, the FSA began discussions on stricter rules for digital assets to protect investors. A clarified regulatory framework was expected by mid-2022.

In the spring, Reuters reported plans to implement FATF guidelines for local cryptocurrency firms. They would require providers of virtual asset services to disclose transaction data.

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