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Japan became the first country to pass a bill surrounding stablecoins as major economies around the world look to introduce regulation after TerraUSD (UST) crash. Japan’s Parliament on Friday signed a stablecoin bill into law recognizing stablecoins as digital money. It allows holders the right to redeem stablecoins at face value.
Moreover, the law only recognizes stablecoins backed by yen or another legal tender. However, the law fails to mention existing asset-backed stablecoins such as Tether (USDT) and algorithmic stablecoins.
Japan Passes Stablecoin Law Amid Growing Crypto Adoption
Japan is one of the top crypto-friendly nations witnessing growing crypto adoption by retail and institutional investors. Japan’s Parliament passed a stablecoin bill clarifying the legal status of stablecoins in the country, while defining them as digital money, reported Bloomberg on June 3.
The new law recognizes stablecoins only issued by licensed banks, registered money transfer agents, and trust companies. In fact, the law doesn’t recognize asset-backed stablecoins from overseas issuers like Tether, or algorithmic stablecoins. Besides, the Japanese crypto exchanges don’t list stablecoins.
The new law will be in effect from next year. Moreover, Japan’s Financial Services Agency will soon introduce rules and regulations for stablecoin issuers to approve stablecoins from only allowed banks and companies.
