Circle Considers Issuing Stablecoin in Japan Following New Legislation
As reported by CoinDesk, Circle co-founder and CEO Jeremy Allaire publicly stated that following the introduction of new stablecoin legislation in Japan, Circle is possibly looking to launch its stablecoin in the country.
This comes on the heels of the newly enforced stablecoin law, which came into effect on June 1, hinting at potentially huge opportunities for Circle and other similar firms. This move could open up expansive markets such as cross-border trade, foreign exchange, and global commerce if successful.
Circle’s Interest in Japan
It was during his trip to Japan sometime last month that Circle CEO Jeremy Allaire showed his interest in potential partnerships in the Japanese market.
Japanese Parliament Passes Stablecoin Legislation
In an unprecedented, historic move, the Japanese parliament passed laws governing stablecoins in early June, presenting a much-needed safety net for investors. This makes Japan one of the first major economies globally to pass specific legislation relating to stablecoins.
The newly minted law offers a clear definition of stablecoins, stipulating that:
- Stablecoins are now considered digital currencies.
- Stablecoins are required to be linked to a yen or other legal tender.
- Holders are guaranteed the right to redeem them at face value.
In its current form, the law authorizes the issuance of fiat currency-backed stablecoins by:
- Licensed banks,
- Registered remittance agents, and
- Trust companies.
While the regulation doesn’t touch on the topic of existing asset- or algorithm-backed stablecoins, it’s worth noting that Japanese exchanges do not currently list stablecoins.
Significance of the move
Japan has recently taken steps to ease some of its cryptocurrency regulations, such as token listing and taxation rules. However, the country is generally known to enforce strict regulations around the cryptocurrency space. The introduction and enforcement of a law specifically governing stablecoins offer a clearer legal framework for digital currencies, further promoting the growth and development of Japan’s digital currency market.
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