Japanese Regulator: Stablecoins Are Not Cryptocurrencies Under Current Law

Japan’s top financial regulator, the Financial Services Agency, has exclusively explained to news.Bitcoin.com how stablecoins are treated under current Japanese law. In addition to emphasizing that they are not virtual currencies, the regulator clarified the registration requirements for their issuers and dealers.

Not Virtual Currencies

With the global rise in popularity of fiat-pegged cryptocurrencies, commonly referred to as stablecoins, news.Bitcoin.com asked the FSA how these coins are treated under Japanese law. The regulator clarified:

On Oct. 9, Japanese internet giant GMO announced that it “will start full-scale preparations to issue stable coins of virtual currency.” GMO Internet’s subsidiary, GMO Coin, operates one of Japan’s 16 registered crypto exchanges. The country also has three other crypto exchanges that the FSA has allowed to operate while their applications are being reviewed.

Registration Requirements

The FSA further explained to news.Bitcoin.com that “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.” Nonetheless, the regulator described:

As for fund transfer service providers, the Bank of Japan detailed, “under the Payment Services Act, those registered as fund transfer service providers may perform fund transfer transactions of up to one million yen [$9,000]” without a banking license. “In other words, fund transfer transactions of over one million yen are still handled exclusively by banks,” the FSA elaborated, noting: