the Japanese Financial Services Agency (FSA) recently presented some ideas regarding cryptocurrencies and stablecoins to the Financial System Committee's Payment Services Working Group. It was mentioned that the FSA is unwilling to allow banks outside of trust banks to issue stablecoins. As for stablecoins issued by trust banks, the FSA hopes to relax the reserve requirements that currently mandate all assets be held in the form of bank deposits. However, the FSA also hopes to implement travel rules that require KYC for transfers of stablecoins issued by trust banks.

In 2022, Japan passed stablecoin legislation that supports banks, licensed remittance companies, and trust companies in issuing stablecoins. As part of its working group demonstration, the FSA differentiated between stablecoins issued on licensed blockchains and those issued on public blockchains. It is satisfied with these three types of stablecoins existing on licensed chains, but is cautious about allowing licensed deposit-taking institutions to issue stablecoins on non-licensed chains.