Skip to main content

Japanese Regulator: Stablecoins Are Not Cryptocurrencies Under Current Law

Japanese Regulator: Stablecoins Are Not Cryptocurrencies Under Current Law

Japan’s top financial regulator, the Financial Services Agency, has exclusively explained to news.Bitcoin.com how stablecoins are treated under current Japanese law. In addition to emphasizing that they are not virtual currencies, the regulator clarified the registration requirements for their issuers and dealers.

Also read: Yahoo! Japan Confirms Entrance Into the Crypto Space

Not Virtual Currencies

Japanese Regulator: Stablecoins Are Not Cryptocurrencies Under Current LawJapan’s amended Fund Settlement Law and the amended Payment Services Act which went into effect in April last year regulate the country’s crypto industry. The former defines “virtual currencies,” which include cryptocurrencies, as a means of payment and exempts them from consumption tax. The latter requires cryptocurrency exchange operators to register with the Financial Services Agency (FSA).

With the global rise in popularity of fiat-pegged cryptocurrencies, commonly referred to as stablecoins, news.Bitcoin.com asked the FSA how these coins are treated under Japanese law. The regulator clarified:

In principle, stable coins pegged by legal currencies do not fall into the category of ‘virtual currencies’ based on the Payment Services Act.

On Oct. 9, Japanese internet giant GMO announced that it “will start full-scale preparations to issue stable coins of virtual currency.” GMO Internet’s subsidiary, GMO Coin, operates one of Japan’s 16 registered crypto exchanges. The country also has three other crypto exchanges that the FSA has allowed to operate while their applications are being reviewed.

Registration Requirements

The FSA further explained to news.Bitcoin.com that “Due to its [stablecoin’s] characteristics, it is not necessarily appropriate to suggest what those companies need to obtain or register before issuing stable coins.” Nonetheless, the regulator described:

Generally speaking, companies need to register as the ‘Issuer of Prepaid Payment Instruments’ or the ‘Funds Transfer Service Providers’ based on Payment Services Act, when virtual currency broker dealers trade stable coins.

Japanese Regulator: Stablecoins Are Not Cryptocurrencies Under Current LawThere are two types of prepaid payment instruments: those for one’s own business and those for third-party businesses, according to the FSA. Each has its own reporting and registration requirements.

As for fund transfer service providers, the Bank of Japan detailed, “under the Payment Services Act, those registered as fund transfer service providers may perform fund transfer transactions of up to one million yen [$9,000]” without a banking license. “In other words, fund transfer transactions of over one million yen are still handled exclusively by banks,” the FSA elaborated, noting:

When a person/an entity engages in exchange transactions of one million yen equivalent or less in the course of trade, registration as a funds transfer service provider is required. For exchange transactions exceeding one million yen, a license for banking business pursuant to the ‘Banking Act’ is required.

How do you think stablecoins should be treated under Japanese law? Let us know in the comments section below.

Images courtesy of Shutterstock.

Need to calculate your bitcoin holdings? Check our tools section.

The post Japanese Regulator: Stablecoins Are Not Cryptocurrencies Under Current Law appeared first on Bitcoin News.



from Bitcoin News https://ift.tt/2PpllVw
Labels:

Comments

Post a Comment

Popular posts from this blog

Mt Gox Creditors Updated, Trustee Says Rehabilitation Custodian Is ‘Currently Preparing to Make Repayments’

On August 31, 2022, the Mt Gox trustee Nobuaki Kobayashi explained in a recent letter that the rehabilitation custodian is “currently preparing to make repayments” to Mt Gox creditors. Trustee Updates Mt Gox Creditors — Repayment Date and Exchange Still Unknown Last week speculation and rumors concerning the release of 140K bitcoin ( BTC ) from Mt Gox littered social media platforms and headlines. Bitcoin.com News covered the situation six days ago as a number of people and Mt Gox creditors called the rumors “ fake news .” During that same period of time, a bitcoin whale transferred 10,000 BTC to unknown wallets, and a 2018 annotation , heuristics, and clustering methods show the funds likely originated from the June 2011 Mt Gox hacks. Following the mysterious whale transfer, last Wednesday, Mt Gox published an official update from the court trustee Nobuaki Kobayashi that explains the court is “currently preparing to make repayments” to creditors. Mt Gox creditors have been wait...
Post a Comment
Read more

Fidelity Discusses Bitcoin as Portfolio Insurance — Could Soon Stand in ‘Stark Contrast’ to Path Fiat Currencies Take

Fidelity Digital Assets, a subsidiary of Fidelity Investments, says that bitcoin could be considered portfolio insurance. The firm notes that the cryptocurrency “may soon stand in stark contrast to the path that the rest of the world and fiat currencies may take — namely the path of increased supply, additional currency creation, and central bank balance sheet expansion.” Fidelity Says Bitcoin Could Be Portfolio Insurance Fidelity Digital Assets, a subsidiary of Fidelity Investments, recently published a research study titled “The Rising Dollar and Bitcoin.” The research outlines “how bitcoin could be considered portfolio insurance” as the rising dollar impacts global currency markets. “The strengthening U.S. dollar is wreaking havoc among other countries and may put pressure on the Federal Reserve to soon reverse its tightening monetary actions, something that has precedent based on 1985’s Plaza Accord,” Fidelity explained. In addition, “more monetary debasement may be needed to ...
Post a Comment
Read more

Economists Discuss Russia, China Potentially Developing Gold-Backed Currency That Could Undermine US Dollar

Economists have weighed in on reports that China and Russia may be developing a new gold-backed currency that could undermine the U.S. dollar’s status as the world’s primary reserve currency. Russia and China May Be Developing Gold-Backed Currency Several experts have shared their views on Russia and China potentially creating a new gold-baked currency, Fox Business reported Saturday, emphasizing that China has been buying up huge quantities of gold while Russia was forced off the U.S. dollar due to sanctions imposed on the country following its invasion of Ukraine. The news outlet noted that some experts have cautioned that these moves, along with the closer relationship that has developed between Moscow and Beijing, point to the likelihood of China attempting to launch a gold-backed currency. However, neither Russia nor China has officially confirmed plans for such a currency. Craig Singleton, senior fellow at the Foundation for Defense of Democracies and a former U.S. diplomat,...
Post a Comment
Read more