Japan lets its banks and other entities issue stablecoins
- Reference: 1654498510
- News link: https://www.theregister.co.uk/2022/06/06/japan_regulates_stablecoin/
- Source link:
The regulations stipulate that only banks and other registered financial institutions – like money transfer agents and trust companies – can issue the alterna-cash. Intermediaries, or those who are responsible for the circulation of the currencies, will be required to adopt stricter anti-money-laundering measures. The rules also define stablecoins as digital money and guarantee face value redemption.
Japan's Financial Services Agency (FSA) floated this regime in a March 2021 proposal. Parliamentary assent for the proposal means it will come into effect in 2023. The regulations will apply to domestic financial institutions as well as foreign operations that target Japanese users. The [1]research material supporting the decision relied heavily on trends in the US and Europe.
[2]Retail investors should not invest in crypto, says Singapore deputy PM
[3]Coinbase CEO says everything's OK after SEC filing gives netizens the jitters
[4]Infusion of $3.5bn not enough to revive Terra's 'stablecoin'
[5]Clipminer rakes in $1.7m in crypto hijacking scam
On the same day as the decision, the FSA [6]published a document that considers global use of stablecoins and advocates for their use in Japan – with appropriate regulation.
Within the US, the FSA noted, stablecoins are not regulated but those who handle them must consider anti-money-laundering laws and other statutes such as Combating the Financing of Terrorism regulations.
[7]
The [8]document [PDF] also cites tightened regulations in the United Kingdom and Singapore. In January, the Monetary Authority of Singapore (MAS) took [9]action to limit the promotion of digital payment tokens and UK's HM Treasury tightened regulations on soliciting sales of certain crypto assets.
[10]
Meanwhile, Mitsubish UFJ Trust and Banking Corp. [11]said [PDF] once the legal framework is in place it will launch a Yen-backed stablecoin dubbed Progmat Coin.
Government regulation of stablecoins is likely to be welcome, given the spectacular implosion of so-called stablecoin TerraUSD. That crypto coin saw its [12]value drop by 90 percent in May 2022. After that plunge, the value of linked cryptocurrency Luna tumbled down to almost nothing, suggesting DIY currency schemes lack the maturity that keeps fiat currencies afloat. ®
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[1] https://www.fsa.go.jp/singi/digital/siryou/20220606.html
[2] https://www.theregister.com/2022/05/31/retail_investors_should_not_engage/
[3] https://www.theregister.com/2022/05/13/coinbase_ceo_assets/
[4] https://www.theregister.com/2022/05/17/terrausd_luna_crash/
[5] https://www.theregister.com/2022/06/03/clipminer-cryptocurrency-millions/
[6] https://twitter.com/fsa_JAPAN/status/1532659524414640128
[7] https://pubads.g.doubleclick.net/gampad/jump?co=1&iu=/6978/reg_offbeat/legal&sz=300x50%7C300x100%7C300x250%7C300x251%7C300x252%7C300x600%7C300x601&tile=2&c=2Yp3QQTtWXWEw83pdpvSzaQAAAEM&t=ct%3Dns%26unitnum%3D2%26raptor%3Dcondor%26pos%3Dtop%26test%3D0
[8] https://www.fsa.go.jp/singi/digital/siryou/20220606/jimukyoku.pdf
[9] https://www.theregister.com/2022/05/31/retail_investors_should_not_engage/
[10] https://pubads.g.doubleclick.net/gampad/jump?co=1&iu=/6978/reg_offbeat/legal&sz=300x50%7C300x100%7C300x250%7C300x251%7C300x252%7C300x600%7C300x601&tile=4&c=44Yp3QQTtWXWEw83pdpvSzaQAAAEM&t=ct%3Dns%26unitnum%3D4%26raptor%3Dfalcon%26pos%3Dmid%26test%3D0
[11] https://www.fsa.go.jp/singi/digital/siryou/20220606/sankou3.pdf
[12] https://www.theregister.com/2022/05/17/terrausd_luna_crash/
[13] https://whitepapers.theregister.com/
Re: non-fiat digital currency?
It must has the word "crypto" somewhere in its brochure, that should be enough for all of you luddites
Re: non-fiat digital currency?
As opposed to your crypto currencies that are guaranteed by some arbitrary consensus algorithm over which they have gained control over?
Re: non-fiat digital currency?
>what advantage does it offer over the existing currency
Probably the main benefit is to permit innovation in practical everyday digital currency ie. not highly volatile currencies such as bitcoin or other blockchain-based forms of speculation.
Remember if the government/national bank were to officially adopt a digital currency, they would have to get it right, in all the detail, the first time.
Re: non-fiat digital currency?
Stablecoins are supposed to be backed by a 1:1 reserve of the associated FIAT currency.
I.e. for every $STABLECOIN there has to be $FIATCOIN in reserve to back it. That's where a lot of other stablecoins have fallen over and it is why Tether has always been scrutinised because they very rarely (if at all) release any thorough audits etc.
the decision relied heavily on trends in the US and Europe
The key word here is "trends". Everybody else is doing it so we'll do it too. Any explanation of why financial regulators believe that what the world really needs right now is hundreds and hundreds of adittional currencies, and what real life problems only these currencies can solve is glaringly absent. Because there is no rational explanation.
"only banks and other registered financial institutions"
That should at least guarantee that the yahoos are not going to mess things up this time, but I fail to see the point of all this.
Digital currency ? They're all digital already. I haven't used physical money for the last two years, if I pay, I just bonk the VISA on the machine and I'm done. If I need to transfer money or pay online, I just connect to my bank and I make the order - it's processed in less than five seconds (during banking hours, that is).
I fail to see how a so-called stablecoin will bring anything better to the market.
Re: "only banks and other registered financial institutions"
The hidden value is in the "real" investors money that they can consume in their R&D into digital exchange mechanisms.
Yes it doesn't matter what the currency is when you stick your card into the ATM, I can use my Debit Card all around the world, (except Russia at the mo) and get the relevent cash or make a purchase.
The only reason for this malarchy is the extra grime they can sqeeze into their coffers for just thinking about crypto or digital anything.
The fact that they haven't got a clue, should be glaringly obvious to anyone capable of reading the Register and comprehending the actual exponential number of way things will go wrong - 'cos no one at the top knows what the fuck is going on ........... Wahey
ALF
Re: "only banks and other registered financial institutions"
They're all digital already. I haven't used physical money for the last two years, if I pay, I just bonk the VISA on the machine and I'm done.
But you can still get your "digital" money in cash if you wish to do so and then you can use it without supervision of a third party. When actual digital money comes in (coined as CBDC), you won't be able to exchange it for cash. Then imagine one of your friends commits a thought crime and Mooselini decides to deprive them of their money. Normally you could get some cash to help them out weather the storm, but it won't be possible with CBDC. You'll get flagged and blocked too or your social credit score will take a hit and you'll get banned from using public transport or charging your car.
Every government run by WEF is working on CBDC.
non-fiat digital currency?
This stablecoin is an officially recognised form of currency without a relationship to any physical asset. Its face value is guaranteed because the government of Japan says it is.
How is this not a fiat currency?
If it is a fiat currency, what advantage does it offer over the existing currency, other than that it can be traded without the use of a clearing bank?