Japan Considers Implementing Stricter Rules On Stablecoins

Japan considers implementing stricter rules on stablecoins as they see it as a danger to the nation’s monetary network and that could lead to even harsher regulations as we can see more in our latest crypto news.

The Japanese government considers putting stablecoins under stricter regulations as some authorities consider them as a threat to the country’s financial stability but also the Bank of Japan aims to issue a digital yen which it says is a safer alternative to private virtual currencies. According to Reuters, three Japanese officials revealed that the country looks to increase its efforts to regulate digital assets and as per the reports, some local regulators believe that stablecoins as a form of crypto pegged to fiat could harm Japan’s financial ecosystem as one official stated:

“Japan can no longer leave things unattended with global developments over digital currencies moving so rapidly.”

It’s worth noting that the Financial Services Agency of Japan created a division to supervise the regulation of digital assets and the Ministry of Finance also contemplated increasing the personnel needed. The positive strict regulation could come in favor of Japan’s central bank and the institution already started experimenting with the issuance of CBDCs considering it is a better and safer alternative to private assets. It launched a testing program to determine the technical feasibility of such a product.
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The operation could be divided into two phases as the first one is already live and will be completed by March 2020. Shinichi Uchida who is the Bank’s executive director said:

 “we believe initiating experiments at this stage is a necessary step.”

Japan considers implementing stricter stablecoin rules as the People’s Bank of China already expressed concerns over digital currencies and stablecoins because they could negatively impact the global financial system. The Deputy Governor of the institution Fan yifei described the assets as speculation tools that have the potential to endanger the global financial and social security:

“Some commercial organizations’ so-called stablecoins, especially global stablecoins, may bring risks and challenges to the international monetary system, and payments and settlement system, etc.”

The PBoC is developing its own central bank digital currency and contrary to the decentralized nature of private assets, the digital yuan will be fully controlled and distributed by Chinese authorities.