The top financial regulator in Japan aims to restrict stablecoin issuance.
The Financial Services Agency (FSA), Japan's top regulator, aims to propose a legislation that would only enable banks and wire transfer firms to issue stablecoins in a blow to issuers like Tether, according to Nikkei.
According to reports, reserve assets will back Fiat-backed cryptocurrencies.
For instance, the Japanese government agency is also focused on tightening anti-money laundering (AML) regulations in the country.
Last year in December, a subsidiary of Tokyo-based IT behemoth known as GMO, launched the first regulated stablecoin pegged to the price of the Japanese national currency yen.
In addition to this, stablecoin issuers have also come under scrutiny in the U.S lately. Last month, the Treasury Department requested the U.S. Congress to keep eyes on dollar-backed cryptocurrencies like banks to ensure adequate protection.