How should Japan deal with stablecoins? ─btokyo members hold a closed event
In June 2022, the revised Payment Services Act was enacted, establishing a legal framework for the issuance and distribution of “stablecoins” in Japan. The revised Payment Services Act will come into force within one year of its promulgation, and is expected to come into force from this spring to early summer.
On February 9, a few months before the enforcement, N.Avenue Co., Ltd.'s community project “btokyo members”, which handles this media “coindesk JAPAN”, held a member-only closed event, “What is the heated debate about ‘stablecoins' and Japan?” Opportunities for 2023, as told by leading figures” (coindesk JAPAN is a media partner).
At the event, Mr. Yosuke Shiraishi, CEO of ARIGATOBANK Co., Ltd., who is the chairman of the stablecoin section of the Japan Crypto Asset Business Association, Mr. Ken Kawai of Anderson, Mori and Tomotsune Law Office, and the stablecoin issuance and management platform ” Mr. Tatsuya Saito of Mitsubishi UFJ Trust and Banking, who is working on the development of Progmat Coin, will be on stage. Pushed by the environment of a closed event and the enthusiasm of participants with a high degree of interest, a dense and deep discussion unfolded.
Since it is a closed event, we cannot introduce the details, but by introducing the atmosphere and enthusiasm of the event on the day, we would like to introduce the development and potential of stablecoins in Japan.
“Stablecoin” as defined by the revised Payment Services Act
Before that, the first thing I would like to note as a major premise is the definition of stablecoins covered by the revised Payment Services Act.
In general, stablecoins are a type of crypto-assets overseas, and refer to “crypto-assets whose value (price) has been stabilized in some way”. In the crypto asset ecosystem, it is expected to play a role different from that of Bitcoin (BTC) and Ethereum (ETH), whose prices can fluctuate greatly.
On the other hand, the revised Payment Services Act stipulates that stablecoins are “issued at a price linked to the value of legal currency and promised to be redeemed at the same amount as the issue price”. It is regulated as digital money used as a means of
For example, in the spring of 2022, the collapse of the stablecoin Terra USD (UST) caused a widespread decline in the cryptocurrency market. I didn't. These algorithmic stablecoins are not subject to the revised Payment Services Act.
Why these three?
The event started with a brief profile of the three speakers and their involvement with stablecoins. First, in order to get a bird's-eye view of the whole picture, Mr. Shiraishi explained the history of discussions on stablecoins in Japan from 2020 to the present.
While there are several crypto-asset industry associations, the Japan Crypto-Asset Business Association has taken the form of summarizing discussions on stablecoins. He said there weren't that many people who were willing to spend time working on something new that didn't exist yet as a main goal, and as a result, “the three of us here made it to the end.”
Next, Mr. Kawai explained the main points of the Revised Fund Settlement Act under the title of “Main Points of the Stablecoin Legislation”. While saying, “Just the main points…”, he explained important points about the overall picture of regulations, the definition of electronic payment methods under the revised Payment Services Act, regulations on issuers, and regulations on intermediaries. rice field.
Although the “point” is “briefly”, it is a regulatory issue, and since there are various patterns in the issuance and distribution of stablecoins, the explanation will inevitably go into the details and be quite technical. It became a content.
There were times when I felt uneasy about whether the audience's understanding could catch up, but the audience seemed to be trying not to leak a word of Mr. Kawai's words.
Mr. Saito of Mitsubishi UFJ Trust and Banking said, “Mr. Kawai explained most of it…” and followed Mr. Kawai's detailed explanation from a different angle.
He also explained the concept and mechanism of “Progmat Coin,” which aims to be a stablecoin issuing infrastructure, and touched on the specific method of introducing stablecoins in Japan based on the revised Payment Services Act.
Possibilities of stablecoins
The talk, which also served as a self-introduction of each of the three, was supposed to be the introduction of the event, but the discussion was already deep and the schedule was pushing forward. The discussion covered a variety of areas related to stablecoins, and the questions from the audience were as deep and technical as the talks of the three speakers.
Kawai pointed out in the revision of the law, “There are many things that have been stipulated, but there are also things that have not been touched.” I felt the difficulty of regulation in a field that is evolving on a global scale day by day.
Regarding the issuance and distribution of stablecoins in Japan, it is conceivable that a Japanese business operator issues a stablecoin backed by the legal currency of the yen. It is also conceivable to introduce circulating dollar-linked stablecoins to Japan. Specifically, Tether (USDT) and USD Coin (USDC).
In that case, Japanese regulations do not apply to overseas issuers, so the hurdles are high and there are many issues, but Mr. Saito introduced a scheme in which trust banks collaborate with overseas issuers. He said he could solve the problem by leveraging the trust bank's natural capabilities.
Just last January, the Japan Crypto Asset Business Association Stablecoin Committee, chaired by Mr. Shiraishi, announced its recommendations on stablecoins, touching on the strictness of regulations in Japan and concerns about hindering innovation. is expressed.
More than a year later, it can be said that the stablecoin situation in Japan has made some progress. What kind of developments can be seen following the enforcement of the revised Payment Services Act, which is expected to take place in spring or early summer? The future movement of stablecoins, which is closely related to the development of Web3, should be watched closely.
In addition, btokyo members plans to hold such events in the future.
｜Text and editing: coindesk JAPAN