Japan’s crypto reform bill has taken a significant step forward as it heads to the National Diet after receiving approval from the Cabinet. The proposed amendment to the Payment Services Act aims to ease regulations for stablecoins and crypto brokerages in the country.
The bill, which has already been approved by the Financial Services Agency (FSA), is now in the hands of the National Diet for legislative debate and voting. In order for the bill to pass through the National Cabinet, it must receive a majority vote from the Cabinet members present at the meeting. The Cabinet, led by the Japanese Prime Minister, operates under the principle of collective responsibility, with the Prime Minister playing a key role in determining consensus.
Once approved by the National Diet, the bill will be assigned to a relevant committee for examination, debate, and potential amendments before being introduced to the full chamber. If both the House of Representatives and the House of Councillors approve the bill, it will then be sent to the Emperor for ceremonial promulgation, formalizing the law and eventually enacting it.
One of the key changes proposed in the bill is the allowance for stablecoins to be backed by short-term government bonds and fixed-term deposits, in addition to demand deposits. This new clause also includes an upper limit of 50% for government bonds and deposits that can be used as collateral for stablecoins. Currently, stablecoin issuers in Japan are required to match the amount of circulated tokens on a 1:1 ratio with cash deposits in regulated bank accounts. The new rule would provide more flexibility for stablecoin issuers to use other assets like Japanese and U.S. government bonds.
Furthermore, the bill will create a new category specifically for “intermediary” crypto businesses or brokerages. Currently, crypto brokerage firms in Japan must fulfill the same registration requirements as crypto exchange platforms in order to operate within the country. Under the new bill, intermediaries will have their own set of requirements and anti-money laundering obligations, separate from exchanges.
Overall, the proposed amendments to Japan’s crypto regulations aim to provide more flexibility and clarity for stablecoin issuers and crypto brokerages, potentially making it easier for crypto firms to enter the Japanese market. The bill’s journey through the National Diet will be closely watched by industry stakeholders and observers to see how it will impact the crypto landscape in Japan.