Japan is joining a growing list of countries seeking to tighten oversight for the stablecoin sector. According to a local report, the Asian country’s financial watchdog wants to limit stablecoin issuance to banks and wire transfer companies to prevent stablecoin runs. The Financial Services Agency (FSA) seeks to join other regulators and legislators globally, including the U.S. Congress and the Securities and Exchange Commission (SEC), in stablecoin scrutiny.
The Financial Service Agency to put forward the new stablecoin proposals in 2022.
According to a local financial newspaper Nikkei, the watchdog, will put forward the new stablecoin proposals in 2022. Stablecoins have become a global concern for regulators. While most countries have yet to issue regulations for Bitcoin, some are shelving these to first focus on stablecoins, spurred by their unchecked rise and their importance to the current cryptocurrency market. There are currently over 70 stablecoins with a total market capitalization of over $150 billion, among which the top 2—Tether and USD Coin—control 70% of the market.
Tether continues to be the most traded stablecoin in the market.
Despite all the regulatory troubles, Tether continues to be the most traded cryptocurrency in the market. In the past 24 hours, it recorded a higher volume than the next seven cryptocurrencies combined, despite several reports exposing the blatant disregard for financial guidelines by iFinex, its parent company. USD Coin, controlled by Circle Financial, also has had quite a few run-ins with U.S. regulators. The FSA believes that limiting issuance to wire transfer companies and banks will prevent stablecoin runs in Japan as these entities are legally required to protect consumer assets. Regulators across the world are actively working on cryptocurrency regulations.