The Japanese Financial Services Agency revealed exclusively to Bitcoin News today that, under current law, stablecoins are not cryptocurrencies.
Currently there are two pieces of legislation that cryptocurrency companies must satisfy in Japan. The Fund Settlement Law and the Payment Services Act.
The Fund Settlement Law defines cryptocurrencies as means of payment, making them exempt from tax. The Payment Services Act state cryptocurrency exchanges must register with the Financial Services Agency (FSA).
By the Payment Services Act’s definition, stablecoins are not “virtual currencies.”
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“In principle, stablecoins pegged by legal currencies do not fall into the category of ‘virtual currencies’ based on the Payment Services Act,” the regulator told Bitcoin News.
The regulator explained that due to the varying specific characteristics of stablecoins, there is no universal rule regarding how they should be legally registered.
Even though Japan recently granted the cryptocurrency industry the rights to regulate itself, this only grants it power to regulate cryptocurrencies. In this case, it appears stablecoins will need individual regulation.
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