JAPAN DEFINES WHICH BONDS CAN BACK YEN STABLECOINS

Summary from the TLDR Crypto newsletter

Japan's Financial Services Agency opened a public consultation (running to February 27) on draft rules under the 2025 Payment Services Act that would restrict eligible reserve assets for regulated yen-pegged stablecoins to certain foreign bonds meeting two strict tests. One is a high credit rating (risk category 1-2 or above) and an issuer outstanding amount of at least ¥100 trillion. This is all while adding supervisory guidance for banks and subsidiaries, requiring foreign issuers to pledge not to solicit Japanese retail users, and setting the reserve-composition standards that will govern all trust-based yen stablecoins.