Golden Finance reports that Japan's Financial Services Agency (FSA) recently presented some ideas regarding cryptocurrencies and stablecoins to the Financial System Council's Payment Services Working Group, mentioning a reluctance 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 wishes to implement travel rules, requiring that transfers of stablecoins issued by trust banks must undergo KYC. Japan passed stablecoin legislation in 2022, allowing banks, licensed remittance companies, and trust companies to issue stablecoins. As part of its working group's presentation, the FSA differentiated 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 is cautious about allowing licensed deposit institutions to issue stablecoins on non-licensed chains.
