(Bloomberg) Japan has passed a law that requires stablecoins to be linked to the yen or another legal tender in the wake of the collapsed TerraUSD token.
The new law also stipulates that holders of stablecoins should be able to redeem them at face value.
The new legislation does not address the current asset-backed stablecoins from overseas issues such as Tether.
The legal definition implies that stablecoins can only be issued by licensed banks. Japan’s crypto exchanges do not currently list stablecoins.
Japan’s legal framework will become effective in a year. The regulators intend to introduce regulations targeting stablecoin issuers in the coming months.
The move by Japan comes as other regulators move to put in place safeguards against stablecoins. Regulators are concerned about the financial stability risks of stablecoins following the collapse of TerraUSD.
BTCUSD is down 2.11%.
