Jun 04 (Nikkei) - The upper house of Japan's parliament passed a bill into law Friday to regulate stablecoins, or cryptocurrencies whose value is pegged to that of the yen, dollar or other currencies.
The new law is aimed at curbing financial system risks of stablecoins, which have a combined market value around the 20 trillion yen ($154 billion) level, to strengthen protections for investors.
Under the new law, which revises the payment services law, stablecoins can be issued by licensed banks, registered money transfer agents and trust companies. Japan will introduce a registration system for their circulation and reinforce anti-money laundering measures.
The legal revision primarily consists of three pillars -- regulations on stablecoins, rules for joint monitoring of money laundering and crackdowns on money-laundering tools such as remittable high-priced electronic gift vouchers. Designed to create a fund settlement system matching the digitization of financial services, it is the first law to regulate stablecoins, the use of which is rapidly spreading.
Stablecoins are handled by "issuers" in charge of issuing and managing them and "intermediaries" responsible for circulation. Banks, money transfer agents and trust companies are designated as issuers. As licenses are expected to be issued only to highly credible businesses, the law seems unfriendly to startup companies wishing to issue stablecoins.
