Financial Services Agency\u30fbFinancial Council “Fund Settlement Working Group” Report (January 11, 2022)<\/a><\/p>\n<\/p>\n
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The biggest feature of Stablecoin is its stable value, or in other words, its low volatility<\/strong>. The assets it is linked to can vary (legal currency, commodities such as gold and oil, financial products, crypto assets, etc.), and the mechanism and degree of value stability differ depending on the asset.<\/p>\n<\/p>\n
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Furthermore, it has been thought that the legal regulations concerning Stablecoin vary depending on the type of asset it is linked to<\/strong>.<\/p>\n<\/p>\n
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\n\n\nDigital Money-like Type<\/span>:
\n\n\nCrypto assets Type<\/span>:<\/p>\n
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The “Electronic Payment Method” newly regulated in the revised Fund Settlement Act of Reiwa 4 (2022) is considered to refer to the Digital Money-like type of Stablecoin<\/strong>, and registration as an “Electronic Payment Method Trader” is required to handle (buy, sell, exchange, manage, etc.) the Electronic Payment Method.<\/p>\n<\/p>\n
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On the other hand, as the name suggests, the Crypto assets type of Stablecoin is basically classified as “Crypto assets”.<\/p>\n
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When comparing the legal requirements of “Electronic Payment Method” and “Crypto assets”, the table below shows the differences.<\/p>\n
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<\/p>\n\n\n\n\nRequirements for “Crypto Assets”<\/th>\n Requirements for “Electronic Payment Method”<\/th>\n<\/tr>\n<\/thead>\n \n\n\u2780 Can be used for payment to unspecified persons, and can be exchanged with legal currency with unspecified persons<\/td>\n \u2460 Can be used for payment to unspecified persons, and can be bought and sold with unspecified persons<\/td>\n<\/tr>\n \n\u2781 Can be recorded and transferred electronically<\/td>\n \u2461 Can be recorded and transferred electronically<\/td>\n<\/tr>\n \n\u2462 Is not a legal currency or currency-based asset<\/span><\/td>\n \u2462 Limited to currency-based assets<\/span><\/td>\n<\/tr>\n<\/tbody>\n<\/table>\n<\/figure>\n<\/p>\n
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As shown above, Crypto assets and Electronic Payment Method differ in whether they are currency-based assets<\/strong>. Currency-based assets are legally defined as follows:<\/p>\n<\/p>\n
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In this law, “currency-based assets” refers to assets that are denominated in Japanese currency or foreign currency, or that are stipulated to be fulfilled, refunded, or similar (hereinafter referred to as “debt fulfillment, etc.”) in Japanese currency or foreign currency.<\/p>\n
Japanese Fund Settlement Act Article 2 Paragraph 6<\/cite><\/p>\n<\/blockquote>\n<\/p>\n
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In other words, it is assumed that they have functions similar to legal currency and have stable value. Being a currency-based asset can be said to be a requirement that well represents the nature of Stablecoin, which is stability of value.<\/p>\n
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On the other hand, therefore, the Electronic Payment Method corresponds to the “funds” in the aforementioned foreign exchange transactions, and registration as a “Fund Transfer Service Provider” is required to issue the Electronic Payment Method.<\/p>\n
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In other words, the legal amendment in Reiwa 4 (2022) added new regulations for intermediaries (Electronic Payment Method), considering that while the existing regulations (foreign exchange transactions) could be applicable to issuers of Stablecoin, there were no regulations applicable only to intermediaries in business models where issuers and intermediaries are separated.<\/p>\n
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<\/span>Understanding the Characteristics of Crypto Assets<\/strong><\/span><\/h2>\n<\/p>\n
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With the above in mind, we can summarize the key personalitistics of crypto assets as follows:<\/p>\n
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\n\n\nIndeterminacy<\/li>\n<\/ul>\n<\/li>\n<\/ul>\n
\n\n\nValue Volatility<\/li>\n<\/ul>\n<\/li>\n<\/ul>\n<\/p>\n
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<\/span>Indeterminacy<\/span><\/h3>\n<\/p>\n
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Crypto assets can be used for transactions regardless of the issuer. This means it can be used in a wide range of transactions without any restrictions. However, since it does not have legal tender status (the legally recognized ability to settle debts at face value), it is necessary for the transaction partner to agree to use crypto assets as a means of payment.<\/p>\n
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<\/span>Value Volatility<\/span><\/h3>\n<\/p>\n
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In the case of crypto assets, which do not have a centralized issuer like a bank, it is unclear what their intrinsic value is based on, resulting in high volatility. Therefore, there is a speculative aspect to crypto assets. However, as mentioned earlier, at least legally, “crypto assets” is purely functional as a means of payment.<\/p>\n
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<\/span>Summary: <\/strong>Consult a Lawyer for Legal Issues Regarding Crypto Assets and Electronic Money<\/span><\/h2>\n<\/p>\n
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As mentioned above, the legal regulations applied to crypto assets as an investment (financial product) and as a means of payment are significantly different. Therefore, careful judgment is required when considering a business venture.<\/p>\n
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Furthermore, legal regulations concerning crypto assets are still undergoing revisions, making it a field with considerable room for interpretation in practice. Therefore, if you have any legal questions about crypto assets, please consult with a knowledgeable lawyer.<\/p>\n
<\/span>Introduction to Our Firm’s Measures<\/span><\/h2>\n<\/p>\n
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Monolith Law Office is a legal office with extensive experience in both IT, particularly the internet, and law. We provide comprehensive support for businesses involved in crypto assets and blockchain.<\/p>\n
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