Illustration by Alex Castro / The Verge

Japan is proposing new restrictions that would only allow banks and wire transfer services to issue stablecoins, first reported by Nikkei Asia.

Stablecoins are a type of digital currency that’s pegged to an external asset, like a fiat currency, gold, or other investments, in an attempt to keep the coin at a stable price. Tether is one example of a stablecoin, and it’s no stranger to controversy. In October, it was fined $41 million for old claims that each token was backed 1-to-1 by its cash reserves — according to the CFTC, “Tether reserves were not ‘fully backed’ the majority of the time.”

This follows similar plans to regulate stablecoins in the US

The country’s Financial Services Agency (FSA) plans to introduce the legislation in…

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