Speaking to news.Bitcoin.com, Japan’s financial watchdog, the Financial Services Agency (FSA) has explained that under the current law, stablecoins aren’t considered virtual currencies.
With the increasing popularity surrounding fiat-pegged currencies, the Japanese regulator stated:
“In principle, stable coins pegged by legal currencies do not fall into the category of ‘virtual currencies’ based on the Payment Services Act.”
The FSA also clarified the registration requirements for companies looking to issue stablecoins, stating, “Due to its [stablecoin’s] characteristics, it is not necessarily appropriate to suggest what those companies need to obtain or register before issuing stable coins.”
Japan recently announced that it has granted the cryptocurrency industry self-regulatory status, allowing the Japanese Virtual Currency Exchange Association to govern the laws of the crypto industry. Additionally, the FSA is looking to clamp down on the amount of money investors can borrow for margin trading with cryptocurrencies.