Japan will be stricter on stablecoins 

The Japanese government is concerned about the rising popularity of stablecoins in the country because of the major risks they could pose. That is why Japan is considering tighter regulations on the use of stablecoins. 

The government sees stablecoin as a big problem to the country’s financial stability, that is why aside from stricter rules, it also aims to roll out a digital yen as a safe alternative. 

One Japanese official said: “Japan can no longer leave things unattended with global developments over digital currencies moving so rapidly.” 

In favor of its CBDC? 

The financial instability concerns have solid grounds to start with, but it appears that Japan’s decision to tighten stablecoin regulations is to make way for its own CBDC. In fact, the government has already started a program to test the feasibility of its digital yen. 

While stablecoins are slowly but surely being restricted, the digital yen is being gradually rolled out for wider adoption. 

Similar to China’s move 

China is also on the same track of slowing down cryptocurrencies while boosting its own CBDC called digital yuan. 

According to the People’s Bank of China, stablecoins are speculative assets that can have a negative impact, not only in China but also in the global economy as well. It also added that stablecoins could also bring a threat to the global monetary, payments, and settlement system. 

While highlighting the “threats” of stablecoins, a digital yuan would provide the Chinese government full control over the digital currency, unlike the decentralized nature of stablecoins. 

China has repeatedly downplayed the threats of centralized control on CBDC, saying that the digital yuan would “maintain citizens’ privacy and protection.” 

 

Image courtesy of Cointelegraph News/YouTube

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