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Historic Stablecoin Move From Japan! Here are the details!

In a historic move, Japan's parliament today approved an important law on stablecoin regulation, Bloomberg reported today.

Historic Stablecoin Move From Japan! Here are the details!

In a historic move, Japan’s parliament today approved an important law on stablecoin regulation, Bloomberg reported.

Japan Approves Critical Law

While last month’s TerraUSD crash came as a global shock, Japan took a concrete step that reassured investors. The Terra crisis, which caused billions of dollars to evaporate, alarmed many Asian countries, especially South Korea. The report states that although the law will take effect in a year, Japan’s stablecoin It is stated that it is one of the first major economies to enact a special law for the . The bill provides clarity on the definition of stablecoins, which will now be considered digital currencies and must be pegged to another fiat currency, such as the yen or dollar. The critical law also guarantees investors the right to use stablecoins at face value. Stablecoins can now only be issued by licensed banks, registered money transfer agents and trust companies.
stablecoin
stablecoin
The bill does not address existing asset-backed or algorithmic stablecoins. However, exchanges in Japan do not list stablecoins. The bill, drafted by Japan’s Financial Services Agency (FSA), is scheduled for late 2021, was passed by the Assembly in mid-March this year, and is now passed by a majority at the Assembly’s plenary session. In the wake of the TerraUSD (UST) collapse, this quick move by Japan could help counter the crisis of confidence in cryptocurrencies.

Western Countries Take Action

Experts say cryptocurrency regulation is inevitable, but regulators need to be educated about it. In the crypto market turmoil last month, tether temporarily lost its index to the dollar before rebounding. The UST also lost its index to the dollar. This led to a sale that caused the company’s token, LUNA , to drop to zero dollars. This collapse has prompted warnings that algorithmic stablecoins may not have a future.
Stablecoins have been a focal point for regulators and governments around the world lately. Earlier this year in the US, Senate Banking Committee Member Pat Toomey presented a draft law to regulate stablecoins. US Treasury Secretary Janet Yellen last month urged lawmakers to pass legislation on stablecoins. In April, the UK government announced plans to bring stablecoins into regulatory jurisdiction. On Tuesday, the British government also released a proposal to change existing rules to prevent failure of stablecoin firms that could pose a “systemic” risk.

 

Samuel Hegi

Samuel Hegi , who first became acquainted with blockchain technology in 2014, is highly critical of blockchain technology. Samuel Hegi, a journalism graduate from the University of Brighton Theblockchainnew.com he is the editor-in-chief of the news portal. Blockchain is love.

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