Japan Submits Bill to Ease Cryptocurrency Regulations to Parliament... Expectations for Activation of Stablecoins and Brokerage Businesses

# Japan Eases Regulations on Stablecoins and Crypto Brokers, Awaits Parliamentary Approval Japan's government has submitted a bill to parliament aiming to ease regulations on stablecoins and cryptocurrency brokers. The proposed amendments are expected to facilitate easier market entry for cryptocurrency firms in Japan. According to CryptoNews on the 10th, the Financial Services Agency (FSA) announced that the Cabinet has approved the amendment to the 'Payment Services Act' and submitted it to the National Diet. The bill, already approved internally by the FSA, will now undergo the legislative process in parliament. For the bill to pass, it must go through two rounds of parliamentary review. Initially, it will be scrutinized and potentially amended by the relevant standing committee, followed by votes in both the House of Representatives and the House of Councillors. If approved by both chambers, the bill will be promulgated and formally enacted into law. # Expanded Collateral Assets for Stablecoins, Eased Broker Regulations A key aspect of the amendment is the expansion of permissible collateral assets for issuing stablecoins. Currently, stablecoin issuers in Japan must deposit an equivalent amount of cash to the circulating tokens in regulated bank accounts. The proposed amendment relaxes this requirement, allowing short-term government bonds and time deposits to be used as collateral. However, collateral assets in the form of government bonds and deposits will be capped at 50%. Additionally, for government bonds, only those with maturities of up to three months will be permitted. The amendment also introduces a separate regulatory category for ‘cryptocurrency brokers,’ distinguishing them from existing cryptocurrency exchanges. Presently, cryptocurrency brokers in Japan are required to register as Virtual Asset Service Providers (VASPs), akin to exchanges. If the amendment passes, brokers will follow a different regulatory framework and anti-money laundering (AML) obligations from exchanges. # Japan Crypto Market Awaits Regulatory Overhaul Should the bill pass through parliament, market entry for cryptocurrency firms in Japan is expected to become significantly easier. The expanded flexibility in asset management for stablecoin issuance could enhance the competitive edge of related industries within Japan. Moreover, the introduction of a distinct regulatory system for brokers could be a positive development for businesses planning differentiated business models from conventional exchanges. However, the final form of the bill will be determined through the parliamentary review process.