Japan puts new restrictions on stablecoins

Illustration by Alex Castro / The Verge

Japan is proposing new restrictions that would only allow banks and wire transfer services to issue stablecoins, first reported by Nikkei Asia.

Stablecoins are a type of digital currency that’s pegged to an external asset, like a fiat currency, gold, or other investments, in an attempt to keep the coin at a stable price. Tether is one example of a stablecoin, and it’s no stranger to controversy. In October, it was fined $41 million for old claims that each token was backed 1-to-1 by its cash reserves — according to the CFTC, “Tether reserves were not ‘fully backed’ the majority of the time.”

The country’s Financial Services Agency (FSA) plans to introduce the legislation in...

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