Japan become one of the first major economies to establish a legal framework around stablecoins after the collapse of the TerraUSD token last month.
- Japan’s parliament passed a bill that clarified the legal status of stablecoins, categorizing them as digital money.
- Stablecoins must be linked to the yen or another legal tender and ascertain holders the right to redeem them at face value.
- The legal clarification effectively means stablecoins can only be issued by registered money transfer entities, licensed banks, and trust firms.
- Meanwhile, the law does not address existing asset-backed stablecoins from foreign issuers like Tether.
Governments across the world are rushing to come up with regulatory guidelines around stablecoins after TerraUSD’s crash led to multibillion-dollar losses from a safe asset.
USTUSD down -0.02%, BTCUSD down -2.74%
Source: Bloomberg
