Japan to Lift Restrictions on Listing Foreign-Issued Stablecoins

Japan's FSA (Financial Services Agency) has proposed revisions to the Payment Services Act that will lift restrictions currently prohibiting local crypto exchanges from listing foreign-issued stablecoins such as USDC and USDT.

In June 2022, Japanese lawmakers approved a bill to amend the country's Fund Settlement Act to clarify the legal status of stablecoins, requiring them to be linked to the yen or another legal tender.

The latest revisions will allow local crypto exchanges to handle payments-focused stablecoins issued by foreign entities outside Japan and pegged to foreign currencies such as the US dollar, subject to them maintaining sufficient reserve assets and complying with AML rules.

A limit of JPY 1 million (USD 7,500) per transaction would be applied for remittances using foreign-issued stablecoins.

The consultation, published here, is open for comment until 31 January 2023. The Payment Services Act revisions are expected to come into force within 2023.

Separately, the JVCEA (Japan Virtual Currency Exchange Association) has reportedly relaxed its rules to simplify the approval processes for new listings of digital assets.

The approval procedure will be reduced to 30 days instead of the previous six months, unless a digital asset is new to Japan's market. According to earlier reports, the JVCEA hopes to shorten the procedure to just 14 days by April.

The rule relaxation is aimed at lowering market entry requirements, making it easier for startups to compete with established firms, and revitalising Japan's crypto assets market. Currently, only about 50 crypto tokens trade in Japan, compared to more than 13,000 that trade globally.