Japan is expected to enact legislation in 2022 to limit the influence of stablecoins to “clear the way” for a digital yen (CBDC) to be launched in the same timeframe.
According to The Nihon Keizai Shimbun (Nikkei), one of the world’s largest financial newspapers and behind the Nikkei 225 stock index, Japan’s Financial Services Agency (FSA), will propose legislation next year. 2020 aims to tighten stablecoin issuance for banks and wire transfer companies.
The regulations implemented by the FCA are an attempt to tighten the agency’s control over the cryptocurrency market to protect consumers from the potential risks posed by asset-backed stablecoins like Tether (USDT).
The FSA’s move mirrors similar proposals in the US. In November, the FDIC, in collaboration with the Fed and OCC, launched a policy guide for banks dealing with cryptocurrencies by releasing a stablecoin report that included recommendations for the treatment of stablecoin issuers such as: Bank.
According to the report, the law will also include steps to prevent money laundering through stablecoins by providing additional oversight for intermediaries such as wallet providers, while also adding authentication measures. customer identity (KYC).
However, the new rules will likely affect only some stablecoin issuers. For example, Circle, the company behind USD Coin (USDC) that plans to become a US crypto bank amid the country’s regulatory stabelcoin crackdown, has a high percentage of exceptions. rate.
The argument is proven when Circle has publicly announced the escrow mechanism behind stablecoin USDC. Not only that, the global payment giant Mastercard also joined hands with Circle to launch a payment campaign between crypto and fiat, which demonstrates the great faith of major financial institutions in Circle.
However, for Tether (USDT) it is the opposite story. In May, Tether first announced its holdings of assets, which are actually relatively “liquid.” In an attempt to ease the tension, the platform released a new audit report in August, but there are still more “worrying” signals.
The situation was pushed to the climax with the event that Bloomberg suddenly published a “shocking” report about Tether (USDT). The situation took a turn for the worse when Tether and Bitfinex continued to be fined $42.5 million over the USDT escrow case. It is worth noting that there is intervention by the US Assets Futures Trading Commission (CFTC). Therefore, skepticism about whether Tether has enough reserves to support USDT remains a huge question mark.
– See more: Hindenburg Research offers a reward of 1 million USD for valuable information about the “dark side” of Tether (USDT)
Private stablecoin companies, no matter how innovative, are direct competitors to Central Bank Digital Coins (CBDCs) in adoption. In Japan, the Central Bank plans to launch a digital yen, dubbed “DCJPY,” by the end of 2020.
The project is supported by a consortium of nearly 70 companies, including the country’s largest financial institutions, including Mitsubishi, which have all participated in the DCJPY trial. There is currently a stablecoin digital yen in circulation, called “GYEN,” and another pending launch backed by Circle.
Maybe you are interested:
#Japan #proposes #law #restrict #stablecoin #issuance #Tether #USDT #faces #big #challenge