Japan Passes Bill to Regulate Stablecoins

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The Japanese Parliament has passed a bill according to which stablecoins will receive the status of digital money. The document also specifies regulatory requirements for their launch.

According to a Bloomberg publication, Japan has becomeone of the first countries to develop a legal framework for stablecoins. According to the adopted bill, stablecoins will be considered digital money. They must be backed by the Japanese yen or other legal tender at a 1:1 ratio, and stablecoin holders must have a guaranteed right to redeem them at face value.

In the document, which will come into force in a year,It is noted that stablecoins can only be issued by licensed banks, registered money transfer agents and trust companies. The bill does not affect existing stablecoins from foreign issuers, such as Tether, or their algorithmic counterparts. Japan's Financial Services Agency said it will introduce rules governing stablecoin issuers in the coming months.

Stable cryptocurrencies are an important elementcryptocurrency industry, given that their total market capitalization exceeds $161 billion. However, after the collapse of the Terra project, as a result of which investors suffered multibillion-dollar losses, regulators began to view stablecoins with even greater suspicion. Even USDT temporarily lost its peg to the US dollar and was trading at $0.95 per coin. Therefore, many governments are rushing to develop rules for regulating stablecoins in order to protect investors from financial losses.

In February, the Japanese banking groupMitsubishi UFJ (MUFG) introduced the Progmat Coin platform for issuing stable cryptocurrencies backed by the Japanese yen, and the bank plans to launch its own stablecoin in 2023.