According to Odaily Planet Daily, the Japan Financial Services Agency (FSA) recently proposed some ideas regarding cryptocurrencies and stablecoins to the Financial System Council's Payment Services Working Group, mentioning that it is unwilling to allow banks other than trust banks to issue stablecoins. For stablecoins issued by trust banks, the FSA hopes to relax the current requirement that all assets must be held in the form of bank demand deposits as reserves. However, the FSA also hopes to implement travel rules, requiring KYC for transfers of stablecoins issued by trust banks.
Japan passed stablecoin legislation in 2022, supporting banks, licensed remittance companies, and trust companies to issue stablecoins. As part of its working group presentation, the FSA distinguished between stablecoins issued on licensed blockchains and those issued on public blockchains. It is satisfied with the existence of these three types of stablecoins on licensed chains but takes a cautious attitude towards allowing licensed deposit institutions to issue stablecoins on non-licensed chains.