Japan is moving forward with legislation regarding the issuance of stablecoins, i.e., digital assets with their value pegged to fiat currencies or stabilized by an algorithm.
On Friday, Japan’s parliament passed a bill to ban stablecoin issuance by non-banking institutions, local news agency Nikkei reported.
The bill reportedly stipulates that the issuance of stablecoins is limited to licensed banks, registered money transfer agents and trust companies in Japan.
The new legislation also introduces a registration system for financial institutions to issue such digital assets and provides measures against money laundering.
According to the report, the bill aims to protect investors and the financial system from risks associated with the rapid adoption of stablecoins, which saw its market surging up to 20 trillion yen, or more than $150 billion.
The new legal framework will reportedly take effect in 2023, with Japan’s Financial Services Agency planning to introduce regulations for stablecoin issuers in the coming months.
Japan’s stablecoin bill comes in the aftermath of a massive decline on cryptocurrency markets fueled by the Terra tokens collapse, with the algorithmic stablecoin Terra USD (UST) losing its 1:1 value to the U.S. dollar in early May.
The stablecoin market turmoil has not been exclusive to the Terra blockchain as other algorithmic stablecoins like DEI also subsequently lost its dollar peg, plummeting to as low as $0.4 in late May.
The Central African Republic (CAR) has announced plans to proceed with its ambitious Sango Project by tokenizing access to the country’s abundant natural resources. President Faustin-Archange Touadéra posted a photograph of a statement on his official Twitter account Thursday detailing the next steps in the project.
The statement, signed by Minister of State and cabinet chief of staff Obed Namsio, read, in part:
“We are giving everyone access to the riches of our land. In other words, we are transforming them into equally valuable and important digital assets through an unprecedented new administrative and economic movement.”
It went on to say that Touadéra has asked the parliament to prepare a new strategy to create investment opportunities in the country’s economy.
The CAR, which in April became the second country in the world to adopt Bitcoin (BTC) as legal tender, introduced Project Sango last month. On the project’s website, it is claimed that the World Bank approved a $35 million development fund for a Sango crypto hub in the country — even though the World Bank has stated that it will not support the initiative.
Creation of a legal framework for resource tokenization is a key element of the Sango Project, along with establishing e-residency for investors, crowdfunding infrastructure and the founding Sango—the so-called Crypto Island metaverse. The CAR has reserves of gold, oil, iron, diamonds, copper, uranium, rhodium, limestone, cobalt, manganese and other minerals.
The benefits of launching Bitcoin as legal tender in the CAR have been called into doubt due to the fragility of the state and the low level of development in the country. Only a small minority of residents have access to the internet or electricity.
On Friday, South Korea’s Financial Supervisory Service (FSS) began an investigation into payment gateway services that work with digital assets. The FSS is South Korea’s financial regulator that operates under the Financial Services Commission (FSC), both of which are government institutions.
As reported by local news outlet Money Today Co., the FSS had recently demanded reports from 157 payment gateways about any service related to crypto, its plans for the future and disclosure of digital assets. But, an FSS report stated that only six held any digital assets.
Although the FSS is currently the primary financial regulator, on May 31, 2022, South Korea announced the upcoming launch of the Digital Assets Committee. According to the announcement, this is a temporary solution to bring structure to the virtual asset industry following the Terra crash.
Per the announcement, the guidelines include screening criteria for newly-listed assets, market monitoring, trade monitoring, a level of disclosure, and other investor protections. The five major exchanges in the country appear to agree on the standards and have formed their own committee to help prevent another incident similar to Terra.
Soon after the FSS began its investigation, it announced a remote meeting with other financial supervisory authorities from five countries in the Asia-Pacific region. This event was hosted by the Indonesian Financial Supervisory Service and included Australia, China and Japan, as well.
The meeting covered global market conditions and big tech and crypto. The Korean representative mentioned the need for cryptocurrency regulation, disciplinary action around virtual assets and the expansion of financial regulatory frameworks.
On May 24, 2022, South Korean officials opened an investigation against Do Kwon, the primary figure in the Terra incident. Yoon Chang-Hyeon, the chairman of the People’s Strength Virtual Assets Special Committee, who had met with the top exchanges in response, will lead the Digital Assets Committee mentioned above.
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