Is Japan’s FSA Going To Allow Certain Stablecoins?
After the collapse of Terra LUNA, people start thinking about stablecoins seriously. The way UST lost its dollar peg, that's devasting. Many people lost their money in UST. Observing the situation, Japan made its move to pass a bill in order to ban stablecoin issuance by non-banking institutions in June 2022.
It impacts the way local exchange offers its trading. Local crypto exchanges cannot provide crypto trading services in stablecoins like USDT or USDC. Will there be any change regarding Japan's stance on stablecoins?
New regulations in Japan are going to allow investors and traders to trade using stablecoins. According to the Financial Services Agency (FSA) of Japan, they are working on allowing certain stablecoins to trade and it is expected to approve by June 2023.
When they are talking about allowing certain stablecoins to trade in exchanges, it does not mean all stablecoins will be approved without any restrictions. It will be clear later which stablecoins Japan is going to allow with restrictions. Now you cannot say for sure that USDT or USDC is going to be used to trade in the new regulation.
Crypto exchange Kraken stopped its operations in Japan. Kraken is not the only one that made a decision like this. Popular crypto exchange Coinbase recently exited the Japanese market. Customers have options to withdraw crypto assets from Coinbase until February 16, 2023.
If customers do not withdraw their crypto assets and fiat by this time, they have to deal with Legal Affairs Bureau to get their funds. As per legal requirements, Coinbase will convert the remaining cryptocurrencies into Japanese yen (JPY) after February 16, 2023, to send to the Legal Affairs Bureau.
So why did Coinbase stop its operations in Japan? In a blog post, Coinbase mentioned the market conditions to make this harsh decision. In a bear market, it is tough to operate the business at the same speed. They already slashed their workforce twice. Their focus is to increase operating efficiency. So Coinbase can decide to close any project that has a lower probability of success.
Companies have to follow the regulations to operate the business. Let's see how Japan makes its move and comes up with regulations about cryptocurrency. The government has the power to do the right thing that is better for everyone.
So what do you think? Please feel free to leave your comments. Thank you for reading this post. That's it for now. I'll be back with another post.
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