Exciting news from Japan! The Financial Services Agency (FSA) is stepping up its game by requiring cryptocurrency exchanges to set aside liability reserves, all to better protect against hacks and unexpected events.
According to a report from Nikkei, the FSA will update its rules for local companies to ensure they can quickly compensate users who get affected by security issues or other challenges. The FSA highlighted recent hacking incidents at international exchanges as a key motivator for this change.
On Wednesday, the Financial System Council—an advisory group to the FSA—will release a report likely recommending that crypto firms create these new liability reserve funds.
This move comes on the heels of reports that the FSA is looking into regulations that might let banks buy and hold cryptocurrency assets. Japan has a vibrant crypto scene, with about 12 million registered accounts as of February, all set against a population of around 123 million.
Related: SoftBank’s PayPay shakes things up for Binance Japan users
New Yen-Pegged Stablecoin Hits the Scene
In an exciting development, Tokyo-based fintech firm JPYC has officially launched a new digital asset pegged to the Japanese yen after establishing regulations recognizing its potential! The JPYC stablecoin is backed dollar-for-dollar by bank deposits and government bonds.
Last year, Japanese regulators banned non-bank institutions from issuing stablecoins. However, the FSA hinted in August that it might approve the first yen-backed token by 2026.
Many of Japan’s biggest financial institutions, like Mitsubishi UFJ Financial Group and Mizuho Bank, have already launched their stablecoin issuance platform called Progmat in 2023 and are reportedly on the lookout for their own tokens as well.
Even Monex Group, another major player in Japan’s financial scene, is considering launching its own yen-pegged stablecoin.
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