StablecoinsΒ is a type of cryptocurrency in which the value of the digital asset is intended to be correlated to another cryptocurrency, exchange-traded commodities, or fiat currency as the reference asset.
In theory, a stablecoin that is backed by a reference asset could make its value track the peg and not experience the wild fluctuations of many digital assets. However, in practice stablecoin issuers have not been proven to maintain adequate reserves to support a static value.
Stablecoins have various purposes. They can be used for payments and are less volatile than cryptocurrencies. However, some have failed to maintain their stable value. Stablecoins usually do not offer interest returns to the holder.
Japan’s financial regulator (FSA) is poised to lift the ban on foreign stablecoins such as USDT and Tether in 2023, according to an inside report. This could have major implications for the country’sΒ cryptocurrencyΒ market, and bring a whole new set of opportunities for investors and users alike.Β
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Currently, none of the 31 registeredΒ cryptocurrencyΒ exchanges in Japan offer trading in stablecoins. But with the impending ban lift, this is likely to change in the near future.
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This news has been widely anticipated since Japan passed a bill banning non-banking institutions from issuing stablecoins in June 2022. It looks like Japanese citizens may soon have access to the benefits, which could open up a world of possibilities for crypto investors and traders alike.
As was previously reported, a law to prohibit foreign stablecoins was approved by the Japanese parliament in June 2022, requiring stablecoin issuers to only connect their digital currency to the Japanese yen or another legal cash.
The new legislation, which is scheduled to go into force in 2023, appears to have had an impact on many crypto businesses because none of the 31 Japanese exchanges that have registered with the FSA have since offered stablecoin operations. Numerous significant cryptocurrency exchanges, suchΒ CoinbaseΒ and Kraken, recently stopped operating in Japan due to the country’s struggling cryptocurrency sector.
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