Japan has become a beacon of regulatory clarity, especially in the stablecoin space, paving the way for a comprehensive stablecoin framework that sets itself apart as a global leader in dealing with a complex cryptocurrency environment.。

A Toughness Approach

Japan's regulatory history was shaped by the 2018 Coincheck hack, which was characterized by tenacity。While other countries may be hesitant, Japan's regulatory approach played a key role in protecting user assets during the FTX crash in November 2022.。The rules requiring cryptocurrency exchanges to segregate assets indicate a strong stance to ensure users can recover their money in a crisis.。

Stablecoin regulations clearer

In the global debate over stablecoin regulation, Japan has taken a decisive step by implementing a stablecoin law。This not only positions Japan as a pioneer, but also highlights the feasibility of stablecoin regulation。

In contrast to the U.S. Congress, which has been working to address the issue and the upcoming EU regulations, Japan's approach appears proactive and clear-cut。

Comparison of Japan, Singapore and Hong Kong

In the global regulatory landscape, Japan is on a par with Singapore and Hong Kong, two jurisdictions that, while not lax, offer a clear roadmap for cryptocurrency exchanges.。These countries have established comprehensive regulatory frameworks that provide a sense of certainty to industry participants and create an environment where rules are strict but transparent and easy to operate.。

Japan's stablecoin regulation imposes strict conditions that only allow banks, trust companies and money transfer service providers to issue stablecoins。The requirement that 100% of stablecoin assets be held by trust companies in Japan and be invested only in domestic bank accounts underscores Japan's commitment to security.。However, this also presents unique challenges, especially for the yen stablecoin, which faces barriers to profitability due to Japan's low interest rates.。

Japan responds to stablecoin concerns

The collapse of crypto projects and persistent concerns about stablecoin stability have prompted Japan to address a fundamental question: whether issuers actually own stablecoin-backed assets？Japan's stablecoin regulations focus on ensuring the authenticity and accessibility of assets and are designed to prevent situations where investors could face a run.。

In addition, Japan's stablecoin regulations, while strengthening security, also pose difficulties for profit-oriented issuers.。The requirement that 100 per cent of fiat currency supporting stablecoins must be deposited in trust funds in Japan and invested only in bank deposits in Japan poses a challenge, especially as low interest rates are generally imposed by the Bank of Japan.。How to strike a balance between compliance costs and evolving business models is critical for stablecoin issuers。

Real-time cases of Web3 in Japan

As Japan evolves as a Web3 capital, its stablecoin regulatory journey provides a real-time case study。Balancing safety and profitability, controlling compliance costs, and addressing the unique challenges of a low interest rate environment have made Japan an important player in shaping the trajectory of global stablecoin adoption。As other jurisdictions are also working on stablecoin regulations, Japan's proactive approach will be a valuable signpost in the changing cryptocurrency compliance landscape.。