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

According to Coinpost, the Director of the Planning and Coordination Bureau of Japan's Financial Services Agency, Abura Shigeyuki, proposed a comprehensive system reform plan for crypto assets and stablecoins today based on last month's discussions by the Financial Council working group. Notably, it will introduce an "asset domestic holding order" for cryptocurrency exchanges, which means they need to hold certain assets domestically. This move aims to learn from the bankruptcy lesson of large exchange FTX in 2022 and further strengthen user asset protection. In addition, as part of new system reforms, intermediary services in crypto asset trading will be established as independent businesses. Under current regulations, even if only engaged in intermediary services one needs to register as a cryptocurrency exchange; however this reform will allow business operations under a more efficient regulatory framework. It is expected that companies with broad customer bases such as gaming companies and telecommunications firms will enter this field. For example, new businesses like NFT transactions within game applications and payment services using crypto assets can be launched.

Regarding stablecoins, there are also plans to promote flexibility adjustments for trust-type support assets. Specifically speaking , it is being studied whether high-security short-term government bonds or fixed-term deposits with certain terms could be used as supporting assets . Finance Minister Kato stated: "We hope that through system reforms we can create an environment where users feel safe using convenient remittance and payment services." He emphasized that the goal is both user protection while promoting innovation.The Financial Services Agency plans to concretize these reform proposals in future by formulating separate amendments called "Trust Business Law Amendment Bill"and "Funds Settlement Act Related Parts Amendment Bill".

Previously on February 10th news reported that Japan's Financial Services Agency intends to position crypto-assets as financial products.