The Japan Financial Services Agency proposes a comprehensive institutional reform plan for cryptocurrency and stablecoins

According to Coinpost, Yoshiyuki Yabuki, Director of the Planning and Market Bureau of the Financial Services Agency of Japan, proposed a comprehensive institutional reform plan for cryptocurrency and stablecoins based on the discussions of the Financial Review Committee working group last month. It is worth noting that a "domestic asset holding order" will be introduced for cryptocurrency exchanges, which requires holding a certain amount of assets domestically. This move aims to learn from the lessons of the bankruptcy of the large exchange FTX in 2022 and further strengthen the protection of user assets. In addition, as a new institutional reform, the intermediary business for trading encrypted assets will be established as an independent business model. Under the current system, even those engaged in intermediary business need to register as cryptocurrency exchanges, but this reform will allow for business to be conducted under a more efficient regulatory framework. It is expected that gaming companies, communication companies, and other enterprises with a wide customer base will enter this field. For example, new businesses such as NFT trading within gaming applications and the use of encrypted assets to provide payment services will be launched. For stablecoins, it will also promote the flexibility adjustment of trust type supported assets. In particular, research is under way to allow the use of highly secure short-term treasury bond and time deposits with a certain maturity as supporting assets. Finance Minister Kato stated, "We hope to create an environment for users to use convenient remittance and payment services with peace of mind through institutional reforms." He emphasized that the goal is to balance user protection and promote innovation. The Financial Services Department plans to concretize these reform plans in the future, respectively formulating the "Partial Revision Bill of the Trust Industry Law" and the "Relevant Revision Bill of the Fund Settlement Law". On February 10th, it was announced that the Japanese Financial Services Agency plans to classify cryptocurrency assets as financial products.