Circle to Issue Stablecoin in Japan Following New Rules
• Circle is considering issuing a stablecoin in Japan, following the new legislation governing stablecoins that came into effect on June 1.
• The Japanese government has established a framework for overseas stablecoins, which CEO Jeremy Allaire considers “the most important thing” they have done.
• Only licensed financial institutions will be able to issue stablecoins and they must guarantee holders the right to redeem them at face value.
Circle Considering Issuing Stablecoin in Japan
New Rules on Stablecoins Take Effect
The new rules governing stablecoins have come into effect in Japan on June 1, opening up the possibility of partnerships for payment service provider Circle. Co-founder and CEO Jeremy Allaire expressed interest in such partnerships, noting that if stablecoins become more widely used for cross-border trade, foreign currency transactions and global commerce, Japan would become an extremely large market.
The Revised Payment Services Act
Japan’s revised Payment Services Act certifies stablecoins backed by legal tender as an “electronic payment method” and allows their issuance. Under this act, only licensed financial institutions like licensed banks, registered money transfer agents and trust companies are allowed to issue these coins. Furthermore, issuers must abide by tough rules where these coins must be pegged to the yen or other legal tender and guarantee holders the right to redeem them at face value.
Decision to Lift Ban on Overseas Stablecoins
In December last year, the Financial Services Agency moved to lift a ban on overseas stablecoins which created further opportunities for payment services providers such as Circle who recently obtained a Major Payment Institution (MPI) license in Singapore which allows it offer digital payment token services across borders.
Conclusion
Allaire believes that this move from the government will be beneficial for both users of cryptocurrencies as well as businesses who can now make use of blockchain technology safely without fear of repercussions from authorities due to regulation being put into place through these laws.
