Japan wants to force stablecoin holders to register as banks

Japan wants to force stablecoin holders to register as banks

The FSA, Japan’s financial services agency, wants to coerce said that limiting the issuance of stablecoins to banks and wire transfer companies will help mitigate risks, as such companies are legally obligated to protect customer assets. This would mean that companies like Tether would not be able to issue stablecoins to Japanese companies and users unless they are registered as a bank or wire transfer provider. Regulators in the US are also pushing for similar requirements.

As of Tuesday afternoon, stablecoins had a total market capitalization of $ 160 billion and had made $ 80 billion in trading volume in the past 24 hours, according to CoinGecko. Although its dominance gradually declined in 2021, Tether now accounts for 50% of the stablecoin market, followed by US Dollar Coin at 27% and Binance USD at 9%.

Tether was investigated by US officials for his claims that all of its stablecoins are backed by dollar reserves. The company later said that some of its reserves are short-term commercial paper or corporate debt. According to Nikkei Asia, the FSA also plans to bring intermediaries in crypto transactions, such as wallet providers, under its supervision.

Under the new agreement, companies that facilitate transactions will be required to verify the identity of their users and report suspicious activity to the FSA to prevent money laundering. Meanwhile, there has been talk that a group of 70 Japanese companies, including its major banks, will test their digital currency backed by bank deposits next year. Testing for the stablecoin, which is referred to as DCJPY, will begin this year.

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