Crypto investments: Japanese lawmakers pass stablecoin bill

Stablecoins have been protected in Japan after lawmakers passed a bill for them on Friday. A month ago, the TerraUSD (UST) stablecoin collapsed, wreaking havoc among investors who lost billions of dollars as a result.

The new bill requires stablecoin issuers to have a reserve of Japanese yen or other assets to back up their coins. The bill also gives the Japan Financial Services Agency (FSA) the power to regulate stablecoins and ICOs.

This is a positive development for the crypto industry as it shows that lawmakers are taking steps to protect investors. It is also a sign that Japan is taking the lead in regulating the crypto space. According to a tweet.

After the collapse of the TerraUSD, governments across the world began considering an alternative approach to legalizing cryptocurrencies. Japan is one of the world’s largest economies and has been at the forefront of promoting crypto regulations, so if the bill becomes law, it will be the first in creating regulatory standards for stablecoins.

This is good news for the crypto industry as it shows that Japan is open to innovation and wants to protect investors. It is also a sign that other countries may follow suit and start regulating the space.

A stablecoin is a cryptocurrency with a value that is linked to an actual asset, such as gold or the US dollar, to prevent price volatility. The current market value of all stablecoins is about $160 billion.

The bill defines stablecoins as a type of crypto asset and outlines the rules and regulations for their issuance, management, and redemption. Japan’s Financial Services Agency (FSA) will be in charge of supervising and inspecting stablecoins issuers.

Under the bill, issuers will need to register with the FSA, have a capital of at least 10 million yen ($96,000), and disclose information about their business plan, officers, and finances.

The bill also requires issuers to have a system in place to prevent money laundering and terrorist financing, as well as to protect user information.

What’s in the new Japanese stablecoin Bill?

Stablecoins will now be recognized as virtual money linked to the Yen or another legal tender, ensuring that investors may convert them at their current prices, according to the legislation.

While the bill does not specifically mention Facebook’s Libra stablecoin. It does require issuers to have a capital of at least 10 million yen ($96,000). And disclose information about their business plan, officers, and finances.

The law stipulates that stablecoins will be issued by reputable companies, registered money transfer platforms, and banks that have been authorized.

Existing assets backed by stablecoins like Tether and its competitors, on the other hand, are not addressed in the legislation.

The bill was created by the Japanese Financial Agency (FSA) and was supposed to be approved by the House in late 2021. In mid-March, 2022, the parliament accepted it, and it has now been enacted legally.

This is a welcome development for the cryptocurrency industry in Japan, which has seen mixed regulation in recent years. In September 2020, the FSA passed a law that recognized Bitcoin and other virtual currencies as legal tender.

Japan has been at the forefront of cryptocurrency adoption and innovation. In 2016, the country’s biggest electronics retailer, Bic Camera, started accepting Bitcoin payments.

Furthermore, FTX Trading Ltd, a cryptocurrency exchange platform, announced the availability of Japan-specific features for its trading platforms today.

The move by Japan to pass a bill recognizing stablecoins is a positive step for the cryptocurrency industry. It provides clarity and certainty for businesses operating in the space.

The enactment of this bill is a positive development for the cryptocurrency industry and will help to further legitimize cryptocurrencies.

Japan has always been at the forefront of innovation and this move will cement its position as a leader in the space.