Japanese authorities are reportedly reconsidering their regulations on the use of stablecoins like Tether (USDT) in the cryptocurrency market.
According to Japanese news outlet Nikkei, the Financial Services Agency (FSA) of Japan will allow the domestic circulation of foreign-issued stablecoins starting in 2023.
Local exchanges in Japan will be permitted to facilitate stablecoin trading if they meet certain requirements for asset protection through deposits and have a maximum remittance.
The FSA has also warned that allowing stablecoin distribution in Japan will require stricter anti-money laundering measures.
Public opinion on potential solutions to Japan’s stablecoin prohibition is currently being solicited by the authority.
In addition, a law passed by Japan’s parliament prohibits the issuance of stablecoins by non-banking organizations after June 2022.
Regulations on cryptocurrencies, including a proposal to exempt cryptocurrency enterprises from paying taxes on paper profits from issuing tokens, have recently been a focus for the Japanese government.
Officials have also warned about the risks of using algorithmic stablecoins like TerraUSD (UST).