Japan introduces stablecoin legal framework

Stablecoins must be linked to the yen or another legal tender and guarantee holders the right to redeem them at face value, according to the new law. The legal definition means stablecoins can only be issued by licensed banks, registered money transfer agents and trust companies.

The legislation doesn’t address existing asset-backed stablecoins from overseas issuers like Tether, or their algorithmic counterparts. Crypto exchanges in Japan don’t list stablecoins.